https://www.taxtmi.com/caselaws?id=418863 Expenditure by a pharmaceutical company on freebies to medical practitioners is treated as disallowable under Section 37(1) where the payment facilitates conduct prohibited by law. Explanation 1 bars deduction for any outlay incurred for an offence or for a prohibited purpose, and the medical ethics regulations restricting gifts, hospitality, cash and other benefits to practitioners were read as part of that statutory prohibition. The analysis also treats the CBDT circular as clarificatory and rejects the argument that the absence of a direct penal provision against the payer preserves deductibility. The practical effect is that such freebies cannot be claimed as business expenditure. en-us Tue, 22 Feb 2022 00:00:00 +0530 Thu, 15 Jan 2026 15:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=418863 Expenditure by a pharmaceutical company on freebies to medical practitioners is treated as disallowable under Section 37(1) where the payment facilitates conduct prohibited by law. Explanation 1 bars deduction for any outlay incurred for an offence or for a prohibited purpose, and the medical ethics regulations restricting gifts, hospitality, cash and other benefits to practitioners were read as part of that statutory prohibition. The analysis also treats the CBDT circular as clarificatory and rejects the argument that the absence of a direct penal provision against the payer preserves deductibility. The practical effect is that such freebies cannot be claimed as business expenditure. Case-Laws Income Tax Tue, 22 Feb 2022 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=418863