Case Law Details
Bankers Cardiology Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)
Conclusion: Travelling expenses incurred on seminar conducted abroad by assessee-company with the financial aid of the pharmaceuticals company was justified as the same did not give any scope to treat the same for the purpose other than the business of assessee-company so far it related to the medical practitioners.
Held: Assessee-company was a super specialty cardiac hospital providing cardiac treatment to patients. It had regularly organized academic conferences for doctors known as “CARDCON” i.e. Cardiac Conference. For such purchases, the company received contributions from pharmaceutical companies. Assessee debited a certain amount under the head ‘travelling expenses’ for seminar arranged at Hong Kong. Addition was made by AO in respect of travelling expenses as assessee could not explain the purpose and subsequent outcome of the seminar, neither could it show that expenses were wholly and exclusively for business purpose. Assessee however contended before lower authorities that Medical Council of India (MCI) amended the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 guidelines and Income Tax Circular No. 5 of 2012 dated 01.08.2012 had no role to play in deciding the issue since the same had not been issued with retrospective effect. It was held in Max Hospital, Pitampura vs. Medical Council of India, the Delhi High Court held that the MCI regulations were not applicable to the hospitals. Following the same, Tribunal allowed the claim of the assessee and held that neither CBDT Circular issued on 01.08.2012 without any retrospective effect applicable to the instant case of the assessee for AY 2012-13 nor the MCI guidelines which was relied upon by AO while rejecting the claim of assessee-company. The seminar conducted in abroad by assessee-company with the financial aid of the pharmaceuticals company did not give any scope to treat the same for the purpose other than the business of the assessee company so far it related to the medical practitioners. Therefore, assessee’s claim towards travelling expenses was justified.
FULL TEXT OF THE ITAT JUDGEMENT
The instant appeal has been filed by the Assessee before us against the order dated 04.10.2016 passed by the Commissioner of Income Tax(Appeals)-1, Vadodara [Ld.CIT(A) in short] for Assessment Year (AY) 2012-13 arising out of the order dated 13.03.2015 passed by the DCIT, Circle-1(1)(1), Baroda with the following grounds:
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