TaxTMI 
TaxTMI 
2010 (7) TMI 527
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....ed in relation to marketing of the product sold by the appellant." The only issue is in respect of claim of business promotion expenses incurred on the doctors which were admittedly neither the employee nor the agent of the assessee-company. 2. Facts in brief as emerged from the corresponding assessment order passed under section 143(3) of the Income-tax Act, 1961 dated 24-8-2006 were that the assessee has debited an amount of Rs. 6,51,366 under the head "Conference and Business Promotion Expenses". Out of the said expenditure, the Assessing Officer has questioned in respect of expenditure incurred on two Doctors listed as below:- Date Amount Name of the person 11-4-2003 42,000 Dr. Maulik Patwa 31-7-2003 7,500 ....
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....ment is Rs. 7.91 lakhs. Further, Dr. Patwa has continued his business relations with the company, by referring patients for orthopaedic surgical implants even after his joining with Appollo Hospital as assistant professor during 2004-05. The total business which company has received in the financial year from Appollo Hospital is Rs. 8.51 lakhs. It may be noted that the company had no business before joining of Mr. Patwa with Appollo Hospital. (copy of account of retail sale (L.G. Hospital) and Appollo Hospital are attached herewith.). Further to add this, the sales of Mathys (orthopaedic products) have been increased from Rs. 15,40,910 to Rs. 1,90,63,470 during the year under assessment. In view of the above facts it is amply clear th....
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....e authority, the Learned CIT(Appeals) has affirmed the order of the Assessing Officer on the ground that there was no written submission between the doctors and the assessee-company. In his opinion there was no business nexus vis-a-vis, the claimed expenditure, therefore, rightly disallowed by the Assessing Officer. Rather in his opinion it was a gratuitous expenditure and not a business necessity since the assessee was not obliged to incur the said expenditure, hence, held that disallowance was rightly made. 4. Having heard the ld. Representatives of both the sides and considering the records as well as the various authorities cited at the bar we are of the conscientious view that the facts of the case have demonstrated that there was a....
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....s through which he has demonstrated that on account of the training of these two doctors, the company has directly been benefited because these doctors themselves have purchased and sponsored machineries/equipments respectively. Not only that, they have promoted the sales by convincing other professionals but also made them aware about the product hence in a way created a better market for future. Through those figures, the Learned Authorised Representative of the assessee has explained that since the assessee is in trading of Ophthalmic and Orthopaedic equipments, therefore, the expenditure incurred was wholly and exclusively for the purpose of business, hence, allowable under section 37 of the Income-tax Act, 1961. 5. Apart from the ab....
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....overed by one of the decisions of this very Bench cited as Samir Surgitech (P.) Ltd. in ITA No. 4560/Ahd./2003 for assessment year 2001-02 dated 8-6-2007, wherein the Respected Coordinate "C" Bench ITAT Ahmedabad has drawn a conclusion that the sponsorship of foreign trip of one of the doctors by the assessee was a marketing strategy and marketing necessity having clear nexus with the business of the assessee, therefore, nothing but an allowable expenditure. Undoubtedly, the aforesaid view of the Tribunal as well as the case of the assessee is covered on all fours by a landmark decision of Hon'ble Supreme Court in the case of Sasoon J.David & Co. (P.) Ltd. v. CIT [1979] 118 ITR 261/1 Taxman 485 as well as an another ancient landmark decisio....