Substantial questions of law on AMP expenses and doctor payments were admitted, while depreciation disallowance challenge failed.

Bombay HC considered whether disputes over alleged international transaction treatment of AMP expenses and disallowance of payments to doctors raised substantial questions of law; those issues were admitted for further consideration. The court also examined the challenge to deletion of depreciation disallowance and held that no substantial question of law arose because the Tribunal had followed binding and accepted orders applying the block of assets principle, under which depreciation is computed on the aggregate written down value of the block rather than on individual assets. The depreciation challenge was therefore declined at the admission stage.

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Issues: Whether questions relating to alleged international transaction of AMP expenses and disallowance of payment to doctors gave rise to substantial questions of law, and whether the challenge to deletion of depreciation disallowance did so as well.

Analysis: The appeal arose at the admission stage. The challenge concerning AMP expenses was held to merit consideration in view of the pending challenge to the Tribunal's earlier view and was therefore admitted. The challenge concerning payment to doctors was also held to require consideration in light of the Supreme Court's decision on the legality of such expenditure. The challenge to depreciation disallowance was rejected as not raising any substantial question of law because the Tribunal had relied on earlier binding and accepted orders applying the block of assets principle, under which depreciation is allowed on the aggregate written down value of the block and not on individual assets.

Conclusion: The appeal was admitted on the issues relating to AMP expenses and payment to doctors, while the challenge to depreciation disallowance was declined at the admission stage.

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