TaxTMI 
TaxTMI 
2022 (10) TMI 478
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....acts in brief are that the main issue in all the years under appeal (wherein action u/s 263 of the Income Act, 1961 [in short 'the Act'] has been initiated) is expenditure incurred on distribution of gifts / freebies to doctors and Medical Practitioners in the form of televisions, laptops, electronic goods, mobiles, sponsorship of tours and conferences and distribution of other similar items which have been charged as expenditure in the Profit and Loss Account under the head 'Business Promotion Expenditure'. In all the years under appeal, it is the opinion of the Ld. Principle Commissioner of Income Tax (PCIT) that such expenditure was not allowable in terms of Explanation to section 37(1) of the Act being expenditure for a purpose which was an offence or was prohibited under the law. 3.0 At the request of the Ld. AR, ITA No. 345/Chd/2022 pertaining to AY 2010-11 was taken as the lead case. The brief facts of the case in Assessment Year 2010-11 are that the assessee is a limited company and for the year under consideration, the return of income was filed declaring income at Rs. 2,51,98,090/-. A search and seizure operation u/s 132(1) of the Act was carried out at the business prem....
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....interest of revenue and having not satisfied the basic condition, for cancelling the valid assessment order of the Assessing Officer vide order dated 30.12.2019, the order as passed by the Ld.. PCIT (Central), Ludhiana is non-est. 3. Notwithstanding, the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana, having considered the replies filed by the assessee, on the issue of expenditure under the head 'business promotion', which did not include any gifts/freebis to the doctors and Medical Professionals, during the course of original assessment proceedings and during the course of assessment proceedings u/s 153A/143(3) and, therefore, setting aside the issue, again to the file of the AO, is wholly misconceived and not proper. 4. That the Ld. PCIT (Central), Ludhiana having noted the fact from the assessment file that no expenditure was incurred on account of any gifts/ freebis to the doctors/medical professional and the Assessing Officer, also having applied mind on the same issue, both during the course of original assessment u/s 143(3) and the assessment u/s 153A/143(3), the setting-aside of the assessment as framed, after due application of mind by the AO, ....
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....e also regularly audited and the returns of income have also been filed on the basis of such audited books of account. It was submitted that the assessee company was from time to time assessed u/s 143(3) of the Act also but no major additions or disallowances had been made. He drew our attention to a Chart showing the status of original assessments from Assessment Years (AY) 2008-09 to 2018-19 to buttress that no major disallowances or additions have been made. This chart is being reproduced herein under for a ready reference: 4.1 The Ld. AR further submitted that there was a search and seizure operation at the business premises of the assessee on 23.03.2018 and the assessee surrendered a sum of Rs. 5,00,23,500/- in the hands of the company as well as one of the directors. It was submitted that this surrender was also duly disclosed in the return of income and tax at the rate of 78% u/s 115BBE of the Act was also paid by the company as well as the director. It was further submitted that further some additions were also made in the assessments framed u/s 153A of the Act but the assessee did not enter into any litigation but settled the dispute by availing the benefit of the 'Vivad ....
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....that the assessee had submitted identical/ common replies to the Ld. PCIT in response to the said show cause notices but such replies of the assessee did not find any favour with the Ld. PCIT and the Ld. PCIT had observed that such business promotion expenditure was not an allowable expenditure in terms of section37(1) of the Act and had referred once again to the Regulations issued by the Medical Council of India before setting aside the assessment orders on the ground that the AO had not conducted due and relevant inquiries in this regard. 4.5 The Ld. AR submitted that the show cause notices and the orders passed u/s 263 of the Act were almost on identical lines in all the years under consideration except for AY 2017-18, wherein, there was an additional issue relating to transfer pricing. The Ld. AR submitted that on the issue of allowbililty of business promotion expenditure and on the issue of whether or not the AO had made relevant and proper inquiries, his arguments were also going to be identical. 5.0 However, for the sake of completeness, the grounds raised by the assessee in all the other appeals are also being reproduced herein under:- 343/Chd/2022 (A.Y. 2008-09) 1.....
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.... (Central), Ludhiana has wrongly refer to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an acceded fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during ....
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....lication of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Cour....
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....e cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdict....
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....such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (C....
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....uiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not a....
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....5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has....
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....e AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7.....
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....53A/143(3), the setting-aside of the assessment as framed, after due application of mind by the AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld....
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....ame issue, both during the course of original assessment u/s 143(3) and the assessment u/s 153A/143(3), the setting-aside of the assessment as framed, after due application of mind by the AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no ....
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....penditure under the head 'business promotion', which did not include any gifts/freebis to the doctors and Medical Professionals, during the course of original assessment proceedings and during the course of assessment proceedings u/s 153A/143(3) and, therefore, setting aside the issue, again to the file of the AO, is wholly misconceived and not proper. 4. That the Ld.. PCIT (Central), Ludhiana having noted the fact from the assessment file that no expenditure was incurred on account of any gifts/freebis to the doctors/medical professional and the Assessing Officer, also having applied mind on the same issue, both during the course of original assessment u/s 143(3) and the assessment u/s 153A/143(3), the setting-aside of the assessment as framed, after due application of mind by the AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the as....
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....erefore, there was due application of mind on the part of the AO. 6.1 Thereafter, the Ld. AR referred to the following copies of the replies submitted before the AO for the various AYs under consideration: 6.2.1 Assessment Year 2010-11: i) The Ld. AR referred to certified copy of the reply, dated 08.01.2013 as obtained from the DCIT, CC-III, Ludhiana and as submitted during the original assessment proceedings for AY 2010-11 and referred to S.No.9 of the reply at page 2 of the Paper Book-1, in which, the following submissions were made:- "9. Copies of bills above Rs. 50000/- expended under head Business Promotion during the assessment year 2010-2011 are enclosed. The business promotion expenses incurred by the company during the assessment year 2010-2011 are on account of promotional items purchased by the company and dispatched to the distributers/ stockiests on schemes given by the company from time to time to enhance the sales. The company usually gives the schemes to its distributors/ stockiests/ retailers to provide the promotional items free of cost on achievement of sales targets given by the company. Please find enclosed as sample copy of one of scheme circulated dur....
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....te of hearing 18/01/2013. 18.01.2013: Present Mr. Vikas Garg, produced the bills of the expenses (as noted) which were text checked. Further query was raised with respect to certain bills. Next date of hearing 28.01.2013." 6.2.3 The Ld. AR, thereafter, referred to assessment order, as passed originally vide order dated 11.02.2013, wherein no adverse view had been taken in respect of issue of 'Business Promotion Expenses' and it was further argued that detailed enquiries had been made about the nature of expenditure booked under head Business Promotion Expenses and that it is clearly borne out that no "Freebies/Gifts" had been given to Medical Practitioners/Doctors and that the same had been verified during the course of original assessment proceedings. 6.3.0 Assessment Year 2011-12: Similarly, the Ld. AR brought to our attention that the original assessment for AY 2011-12 was also framed u/s 143(3) and that this issue was again the subject matter of examination/verification by the AO concerned and that a copy of reply dated 21.11.2013 had been placed at page 27 of Paper Book-1, wherein, the details of various expenses debited in the profit and loss account along with '....
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....se view vis-à-vis the business promotion expenses. 6.5.0 Assessment year 2014-15: The Ld. AR submitted that the original assessment for this year was also taken under scrutiny and the issue of the 'Business Promotion Expenses' and its nature was examined in depth. Reference was made to the reply, dated 01.12.2016, placed in Paper Book-1, page 116 wherein copy of the ledger account along with vouchers of Business Promotion' expenses were to the Assessing Officer. Our attention was also drawn to the certified copies of the various 'Incentives schemes' of the company for 'Stockists and Distributors' which were placed at pages 129 to 149 of Paper Book-1 and the Ld. AR specifically referred to pages 145 to 149 of the Paper Book-1, wherein certain 'Incentive Schemes' for the Authorized Stockists have been mentioned. The Ld. AR also drew our attention to the 'order sheet entries' for the said year, placed at pages 150 to 156 of the Paper Book-1. He specifically drew our attention to page 152 wherein the concerned Assessing Officer had called for details of the 'Business Promotion' expenses and the order sheet entries which demon....
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....bove Rs.10) lac. (i) Kindly give reason for increase in the following other expenses in F.Y. 2014-15 w.r.t. F.Y. 2013-14: a) Advertisement expenses increased from 4.11% of the sales to 7.78% of the sales in F.Y. 2014-15. b) Business Promotion expense - increasing from 3.06% of the sales to 3.42% of the sales in F. Y. 2014-15. c) Scheme, Rebate & Discount increased from 2.55% of the sales to 6.58% of the sales in F.Y. 2014-15. d) Travelling and other expenses employees increased from 2.07% of the sales to 2.45%) of the sales in F.Y. 2014-15. Justify your reply with documentary evidence. (ii) Kindly submit certified copy of the Form 3CD. (iv) Kindly give reason for mismatch of amount paid to related person u/s 40A(2)(b) in Audit report and ITR Kindly submit the complete reply of the above also on 05.11.2019. As per the request of the counsels, the case is adjourn to 05 11.2019. " 6.8 The Ld. AR further referred to the chart placed at Paper Book-3, at page 1 giving a snap-shot of the 'Business Promotion' expenses booked in different assessment years and brought to the notice of the Bench that seven assessments had been framed u/s 143(3) as per chart hereunde....
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....ARCH ASSESSMENTS Sr No. ASSESSMENT YEAR SECTION UNDER WHICH PROCEEDINGS INITIATED DATE OF ISSUE OF NOTICE U/S 153A/143(2) DATE OF FILING ITR U/S153A/139(1) DATE OF ISSUE OF NOTICE U/S 142(1) DATE OF PASSING OF ORDER 1 2008-09 153A 19.09.2019 02.12.2019 07.10.2019 30.12.2019 2 2009-10 153A 19.09.2019 03.12.2019 07.10.2019 30.12.2019 3 2010-11 153A 19.09.2019 03.12.2019 07.10.2019 30.12.2019 4 2011-12 153A 19.09.2019 03.12.2019 07.10.2019 30.12.2019 5 2012-13 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 6 2013-14 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 7 2014-15 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 8 2015-16 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 9 2016-17 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 10 2017-18 153 A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 11 2018-19 143(3) 25.02.2019 30.11.2018 23.09.2019 30.12.2019 6.10 Referring to the above chart, the Ld. AR submitted that it is proved beyond any doubt that all the search assessments proceeded on a similar pattern and on same dates, which are proved from the order sheet entries of search assessments plac....
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....different Assessing Officers in the original assessment proceedings and in the assessments farmed u/s 153A. c). Since, there is no link or connection of the assessee company with the Doctors/Medical Practitioners, there is no question of giving "Freebies/Gifts" to Doctors/Medical Practitioners and rather, there is evidence on record in the shape of various promotional/incentive schemes meant only for the Stockiets/Distributors which has led to substantial increase in the turnover of the assessee/ profits of the company in subsequent years. d). The guidelines of the 'Medical Council of India' are not applicable to the Stockists/Distributors, since they are not Medical Professionals and Promotional Incentives/Schemes are offered for 'Business expediency' only. e). Reliance was placed by the Ld. AR on various judgments, including that of the Hon'ble Apex Court and of the Jurisdictional High Court in the case of 'Leader Valves Ltd. reported in 295 ITR 273 (P&H), ITR 410 of Dalmia Dadri Cement Ltd. that if one issue has been examined in the case of same assessee, then no adverse view can be taken, if that issue has been accepted, until or unless, the facts are ....
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....ied domestic transactions. It was fairly accepted by the Ld. AR that the said reference was mandatorily required to be made. It was submitted that the issue of making the reference to the Transfer Pricing Officer may be sent back to the AO for the limited purpose of making the reference to the Transfer Pricing Officer. 7.0 In response to the arguments by the Ld.AR, the Ld. CIT DR submitted that the issue nature of the business promotion expenses had not been verified by the AO in all the assessments framed u/s 143(3) of the Act and it was also submitted that the action u/s 263 of the Act had been taken in respect of assessments u/s 153A and, therefore, even if the issue had been examined in the original assessment proceedings u/s 143(3) of the Act, the same would not be having any relevance here. It was further argued by the Ld. CIT DR that even some of the assessments viz. for AYs 2008-09, 2013-14 and 2017-18 had been originally framed u/s 143(1) (a) of the Act and further for two assessment years viz. 200910 and 2015-16, assessments had been framed u/s 143(3) but as per records, no inquiry or investigation had been made by the AO concerned in respect of Business Promotion Expens....
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....CIT had rightly set aside all the assessment orders in the present set of appeals. 8.0 In the rejoinder, the Ld. AR reiterated that detailed queries had been raised with respect to the Business Promotion Expenses by the AO which was very much evident from the various replies and copies of the order sheet entries which have been filed by the assessee and since the assessments were being taken up simultaneously by the AO, the assessee had also submitted replies on identical lines and, therefore, to say that the AO had missed out on raising queries in some of the assessment years is not correct. It was submitted that it was only on the basis of the replies furnished by the assessee in response to the queries that the AO had reached the conclusion that no freebies or gifts were given to any Medical Practitioners or doctors thereby enabling him to form an opinion that Explanation to Section 37(1) of the Act was not attracted in the assessee's case and that the amount of expenditure claimed under the head 'Business Promotion Expenses' was an allowable expenditure. It was submitted that the AO had reached this conclusion after due application of mind although he might not have elaborated....
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....uring the assessment year 2010-2011 are on account of promotional items purchased by the company and dispatched to the distributers/ stockiests on schemes given by the company from time to time to enhance the sales. The company usually gives the schemes to its distributors/ stockiests/ retailers to provide the promotional items free of cost on achievement of sales targets given by the company. Please find enclosed as sample copy of one of scheme circulated during the financial year 2009-2010. Also find enclosed 5 Sales Bills (as sample Bills) giving proof of Promotional items being dispatched to distributors. Further Business promotion expenses also includes the expenses on account of purchase of catalogues, visual aids and price lists of the company to be circulated to the distributors/ stockiest/ retailers and to the marketing staff of the company." 9.3 Further, there is a reply dated 01.12.2016 furnished by the assessee during the course of original assessment proceedings for A.Y. 2014-15, wherein, the same fact was reiterated at S.No.14, page 118 of Paper Book-1, as is evidenced by the following paragraph of the said reply:- 14. "The company purchase and send the gift item....
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....rely for the purpose of sales increment. The total such material purchased and delivered had duly been accounted for in the books of accounts. The prescribed rate list of the assessee is attached herewith as a proof of sales promotion." 9.6 We are also in agreement with the Ld. AR that the original assessments having merged with the assessments framed u/s 153A and further, since all the search assessments were being proceeded with simultaneously, it cannot be said that there was no application of mind by the Assessing Officer on the issue of 'Business Promotion' expenses. The Assessing Officer concerned was conscious of this issue and the same is borne out from the reply of the Assessing Officer in the 'Annotated Report', as enclosed at pages 193 to 197 of Paper Book-1 and in this report dated 18.03.2021, the Assessing Officer has communicated as under:- "However, from the perusal of the record it has been found that the assessee company deals in marketing and trading of generic pharmaceutical, healthcare and cosmetic products through C&F agents for distribution and sales of goods and the company has not made any expenses on any gifts to medical practitioners or their profession....
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.... the audit objections were found during the course of assessment proceedings." 9.8 Thus, from the various documentary evidences as furnished before us and placed in the paper book, we have no hesitation in holding that the no 'Freebies/Gifts' have been given to the Doctors/Medical Practitioners. We have also gone through the judgment in the case of 'Apex Laboratories Pvt. Ltd.' (supra) in detail and we find that while delivering the judgment, the Hon'ble Apex Court had categorically mentioned about freebies/gifts given to the Doctors/Medical Practitioners and we have also referred to the Regulations of the Medical Council of India of 2002 which debars the Doctors from accepting such gifts and we also note that this judgment relates to the Gifts received by 'Medical Practitioners/Doctors only whereas in the present case, it is a fact on record that the AO, after making in-depth enquiries/examinations/verifications of 'Business Promotion' expenses had found that no 'Freebies/Gifts' were given to Doctors/ Medical Practitioner. Above all, the concerned Assessing Officer, who framed the search assessments has categorically admitted in 'Annotated Report' that no such gifts have been giv....
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....pharmaceutical company and as stated above repeatedly, both in original assessments and in the assessments framed u/s 153A, we have clearly demonstrated and furnished documentary evidences in the shape of 'sale bills' issued to the Distributors/Stockiest, and no freebies have been given to the Doctors /Medical Practitioners from the sale bills and in various schemes, of business promotions, it has clearly been mentioned that such incentives are for distributors/stockiest. Further, these guidelines given by the Medical Council are only applicable to the Doctors and not to the Distributors/Stockiest. Para 5.7, page 15 & 16 The PCIT has quoted CBDT circular, in which, again, it has been mentioned about Freebies to Medical Practitioners and their professional associates and the violation of the provisions of Indian Medical Council (2002), have been referred to. Our stockiest/Distributors are not 'medical professionals' and they are not under the guidelines of Medical Council of India. Para 5.8, Page 16 In this paragraph, it has been mentioned by the Ld. PCIT that section 37(1) would cover acceptance of Freebies by Medical Practitioners, which is prohibited by law and then, the re....
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....order sheet entries are similar in all the years. Para 5.9.2 The PCIT has mentioned that assessment for Asstt. Year 201718, 2016-17 and 2013-14 have not been framed u/s 143(3) and for Asstt. Year 2018-19, the assessment was framed for the first time. The assessment for Asstt. Year 2017-18 got abated in view of search conducted on 23.03.2018 and even if, two assessments were framed u/s 143(1), it is submitted that, the assessment framed /s 143(3) are for Asstt. Years 2010-11, 2011-12, 2013-13 & 2014-15, where the detailed investigation/examination was made on the issue of 'business promotion expenses' and three assessments had also been framed u/s 143(3) as per Chart at page no. 1 of PB-3,and therefore, once the issue has been examined in one particular year and here number of times in different assessment proceedings, the issue have been examined, thus, on the basis of consistency and without there being any other material on record, the same view was liable to be taken as per the following Judgments:- a. CIT Vs/ Dalmia Dadri Cement Ltd. (1970) 77 ITR 410 (P&H) b. Berger Paints India Ltd. Vs CIT (2004) 266 ITR 99 (SC) c. DCIT V/s United Vanaspati Ltd. ....
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....the Hon'ble Jurisdictional High Court in the case of CIT vs. Unique Auto Felts Pvt. Ltd. reported in (2009) 30 DTR 221 have held as under: "5. From the finding of the Tribunal, it is clear that the assessee had given proper explanation by filing the necessary confirmations. In view of such a finding, the Tribunal rightly held that power under section 263 of the Act could be exercised where view taken by an Assessing Officer was erroneous. While exercising such power, the Commissioner was bound to take into account all relevant facts. If order invoking the said power proceeds on an erroneous assumption, the same could be set aside by the Tribunal. Finding of the Tribunal is not shown to be perverse. No substantial question of law arises." 9.13 Similarly, the Hon'ble Apex Court in the case of PCIT vs. Shreeji Prints (P) Ltd. reported in 130 taxmann.com 294 has held as under: "Section 69, read with section263, of the Income-tax Act, 1961 - Unexplained investments (Unsecured loans) - Assessment year 2013-14 - Assessee-company loans from two different companies Commissioner noting that said investment in assessee's name in balance sheet of respective companies exercised his rev....