Case Law Details
DCIT Vs Troikaa Pharmaceuticals Ltd. (ITAT Ahmedabad)
ITAT Ahmedabad held that the assessee (pharmaceutical company) is not entitled for claiming deduction under section 37(1) of the Income Tax Act on account of freebies given to the doctors.
Facts- The assessee is a public company and engaged in the business of manufacturing of Drugs & Pharmaceuticals. During the year, the assessee has claimed certain expenditures aggregating to Rs. 10,66,27,149/- under the head business promotions.
AO was of the view that expenditures were incurred in violation of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation 2002 and thus, the same needs to be disallowed as per the CBDT Circular. Accordingly, the AO purposed to disallow the same by issuing a show cause notice to the assessee.
AO not being satisfied with the contentions of the assessee, AO disallowed Rs. 5,31,91,547/- and added to the total income of the assessee. CIT(A) partly allowed the appeal. Being aggrieved, both revenue and assessee has preferred the present appeal.
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