2015 (12) TMI 619

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....y the Revenue in its appeal is regarding the deletion of the disallowance of 70% of expenses incurred by the assessee on physician's samples. The assessee is engaged in the business of manufacturing of drugs and pharmaceuticals. During the course of assessment proceedings, the A.O. noticed that the assessee had claimed expenses in relation to free samples distributed to physicians. The A.O., however, observed that the assessee could not prove that the amount expensed was exclusively for business purpose of the assessee. He observed that the assessee could not provide the list of Doctors and the confirmations from them regarding the receipt of physician's sample. He, therefore, disallowed 70% of the total expenditure on this account and adde....

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....ices. Even, the samples were dispatched through courier/transport agency. The sample dispatch register carried the details of date, serial number, representative number, name of the medical representative, place, transport, weight of the case, freight LR number and the date of receipt. This register was substantiated by the delivery challans and invoice of the transporter and its bills which clearly mentioned the date of delivery, number of package, weight, freight charged etc. The assessee also demonstrated that the samples received were handled by the medical representative who maintained a daily report sheet recording the code no., name of the doctor, speciality and the medicines given to the doctor as physicians sample. These daily reco....

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....l reasoned order passed by the ld. CIT(A) holding that the expenses were incurred for the business promotion activity of the assessee. We therefore do not find any merit in the appeal filed by the Revenue and accordingly dismiss the same. 5. Now, coming to the appeal filed by the assessee being ITA No. 388/Mum/2012, the sole ground taken by the assessee is in relation to the disallowance of Rs. 42,53,924/- on account of claim of expenditure incurred by the assessee on overseas travel of doctors for attending seminar etc. and to encourage product awareness and sales promotion of the products manufactured by the assessee. 6. Admittedly, the assessee is engaged in the manufacturing of drugs and pharmaceuticals. The A.O. noted that the as....