PCIT Vs India Medtronic Pvt. Ltd. (Bombay High Court)
The Bombay High Court considered an appeal filed by the Revenue against the order dated 17 January 2018 passed by the Income Tax Appellate Tribunal, Mumbai Bench, for Assessment Year 2010-11. The Revenue proposed three substantial questions of law relating to (i) whether Advertisement, Marketing and Promotion (AMP) expenditure constituted an international transaction under Sections 92B and 92B(1) of the Income-tax Act, (ii) whether the Tribunal was justified in deleting the disallowance of depreciation on plant, machinery and building despite the absence of manufacturing activity, and (iii) whether the Tribunal was justified in deleting the disallowance of payments made to doctors under Section 37(1) on the ground that such payments violated Clause 6.8 of the IMC Regulations.
On Question (A), the High Court noted that the Tribunal had relied upon its earlier decision in Thomas Cook (India) Ltd. dated 31 May 2016 to hold that the disputed AMP expenditure was not an international transaction under Sections 92B or 92B(1). The Court observed that an appeal against the Tribunal’s decision in Thomas Cook (India) Ltd. had already been admitted by the High Court on 26 August 2019 in connected appeals. Since the same issue was already pending before the Court, the present appeal was admitted on Question (A).
