2016 (1) TMI 500

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....ncome Tax (Appeals)-19, Mumbai [hereinafter referred to as "the CIT(A)] dated 03-05-2013 passed in appeal No. CIT(A)-19/ACIT-9(1)/IT.77/2012-13 for the assessment year 2010-11 and these appeals are being taken up together for adjudication for the sake convenience, having common question of law and facts involved therein. 2. The assessee filed return of income for the assessment year 2010-11 declaring total at loss to the tune of Rs. 8,11,543/-. The assessee has shown book profit at Rs. 1,15,95,750/-. The assessee is engaged in the business of manufacturing of pharmaceutical products. The return was processed u/s 143(1) of the Income Tax Act, 1961 and notice u/s 143(2) of the Act was issued on 24-08-2011 by the AO. After affording an oppo....

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.... AR"] for the assessee argued that the AO has wrongly disallowed the expenditure incurred on account of distribution of samples of medicines which is required to be allowed in view of the provisions of section 37(1) of the Act; therefore, in this regard the order of the learned CIT(A) is also wrong, against the law and facts of the case. He submitted that the disallowance of expenses made in computing total income under normal provision of the Act are not required to be added u/s 115JB of the Act. It is also argued by the learned AR of the assessee that the observation of the learned CIT(A) in upholding the order of the AO increasing the book profit u/s 115JB of the Act by Rs. 1,89,385/-, being disallowance made u/s 14A of the Act is on wro....

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....e of publicity or sale promotion was held to be allowed within the ambit of section 37(3A) and the said sub-section was subject to the limitation as to the allowability therein contained. No doubt, after deletion of the said sub-section, it is required to be seen whether the case of the assessee falls within the purview of section 37 of the Act or not. Distribution of samples of medicines to the physicians free of cost cannot be parted with the business purpose, as the object of supply of free samples of medicines is only to find out by the medical practitioners about the curative value of the medicines and such confidence could be created mainly by the medical practitioners, when they use such medicines towards treatment of the patients. M....