Case Law Details
Merck Specialities Private Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that additional evidences submitted contesting that sales promotion expenses are not hit by the Medical Council Regulations. Accordingly, matter set aside for fresh examination as such additional evidences require examination at the end of AO.
Facts- The only issue contested vide the present appeals relate to disallowance of Sales promotion expenses, which has been confirmed by Ld CIT(A).
Notably, AO has disallowed claim of sales promotion expenses under the erroneous impression that they have been incurred entirely on providing gifts to Doctors, which is in violation of Regulations issued by Medical council of India.
Conclusion- Held that the assessee has furnished relevant details by way of additional evidences. Since the purpose of assessment is to arrive at correct total income, we are of the view that the correct total income of the assessee for these two years could be computed only, if the additional evidences furnished by the assessee are considered. Accordingly, we admit the additional evidences. As rightly pointed out by Ld D.R, all these additional evidences require examination at the end of AO, meaning thereby, this issue requires fresh examination. Accordingly, we set aside the orders passed by Ld CIT(A) on this issue in both the years under consideration and restore the same to the file of the AO for examining it afresh by duly considering the additional evidences furnished/that may be furnished by the assessee in both the years. After providing adequate opportunity of being heard, the AO may take appropriate decision in accordance with the law.
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