Expense on Sponsoring Tours of doctors by Pharma Companies is not allowable

ITA No. 4114/Del/2009 for AY: 2006-07

2. First we take up the appeal of the Revenue for assessment year 2006-07 having ITA No. 4114/Del/2009. The grounds of appeal raised by the Revenue are reproduced as under:

(1) On the facts and circumstances of the case as well as in law, the Ld CIT (A) has erred in deleting the addition of Rs 1,63,90,136/- on account of dis-allowance of 50% of sales promotion expenses without appreciating that the assessee could not establish the allow ability of its claim in spite of multiple opportunities granted to it by the A O and ignoring, inter alia, the following facts:

(i) Assessee’s failure to give the bifurcation of expenses related to business and non business purposes.

(ii) Assessee’s failure to furnish the list of doctors invited by it and who attended the conference – Derma conference 2006- on it invitations.

(iii) Assessee’s failure to furnish attendance sheet of doctors invited by it and who actually attended the conference.

(iv) Assessee’s failure to furnish copy of agreement for sponsorship showing the rates payable for the same.

(v) Assessee’s failure to furnish copy of invitation card printed and issued by it to the doctors.

(vi) Assessee’s failure to furnish the details of expenses incurred on hotel booking, lodging and boarding, traveling and other heads incurred in respect of other than doctors and staff members.

(vii) Assessee’s failure to justify the expenses incurred in respect of family members of doctors and non business associates.

(viii) Assessee’s failure to justify as to how attending of conference by family members of doctors has resulted in increase in sales/business.

(ix) Assessee’s failure to furnish even a single confirmation from the doctors attending the conference on its invitation.

(x) Assessee’s failure to justify the expenses incurred by it on vigorous advertisement campaign to promote its products among the doctors though the same was not permitted by
the Derma association.

(xi) Assessee’s failure to prove the positive impacts on its sale/business as a results of incurring a huge expenditure of Rs 3.85 crores. Rather the sales showed the decline trends during the relevant period and even in subsequent years.

(2) On the facts and circumstances of the case as well as in law. the Ld CIT (A) has erred in deleting the addition of Rs 1,63,90,136/- on account of dis allowance of 50% of sales promotion expenses by accepting the assessee’s plea that the company has to oblige doctors by sponsoring all their expenses regarding traveling, hotels, lodging and food etc., and that if such obligation are not done, the doctors may not prescrible the company’s products. The CIT (A) failed to appreciate that this amounted to bribing the doctors, which was against the public policy, and is an offence. Explanation below Section 3 required such expenses to be disallowed.

3. The facts in brief of the case are that during the year under consideration, the assessee company was engaged in the business of trading in pharmaceutical products by procuring the finished products as well as products manufactured through the loan licensing. The assessee filed return of income electronically on 28/11/2006 declaring total income of Rs. 2,61,13,312/-. The case was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (in short “the Act”) was issued and complied with. In the assessment completed under section 143(3) of the Act on 13/10/2008, the Assessing Officer disallowed sales and promotion expenses amounting to Rs. 1,63,90,136/-. Aggrieved, the assessee filed appeal before the Ld. CIT-(A), who deleted the dis allowance. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above.

4. In the grounds raised, the Revenue is agitated with the deletion of dis allowance of sales promotion expenses.

4.1 Facts in respect of issue in dispute are that in assessment proceeding, the Assessing Officer observed that the assessee debited sales promotion expenses of Rs. 3,85,04,383/-. Details of expenses submitted by the assessee & reproduced in the assessment order, are extracted as under:

4.2 The assessee company explained that out of the amount of Rs. 3,85,04,383/- an amount of Rs. 2,26,11,325/- was incurred on “Dermacon conference”at Hyderabad, which included expenditure on Hotel stay, Air/railway travel, car expenses for doctors who attended the conference. The balance expenses were incurred on sales promotion for Hotel and traveling expenses of doctors to promote the products of the assessee company. According to the Assessing Officer, the assessee failed to produce name & confirmation of the doctors for whom the company incurred hotels stay, travel expenses etc. The Assessing Officer observed that expenses were also incurred on the family members of the doctors and other non-business associates. The Assessing Officer also observed that the assessee company was permitted by the “Derma Association”the activities like, hospitality inside auditorium, audiovisuals workshop, CME and conference, newsletters, CD for CME and conference and sponsoring of the Speaker from South Africa only and incurring expenses on Hotel or travel of the doctors, who participated the conference was not prerequisite for participation in the “Dermacon Conference”. The Assessing Officer also observed that no supporting evidences were furnished in respect of other expenses incurred by the assessee. The Assessing Officer was of the opinion that sales promotion expenses were not actually incurred wholly and exclusively for the purpose of business. The assessee submitted that objective of the expenses was to have corporate recognition among st the doctors and to establish the company’s brand. The amount was incurred by way of commercial obligation in the business emanating from an express or implied contract. The assessee explained that it was spending the amount with the expectation that the doctor shall prescribe its product more often and this express or implied contract emerged from the long-standing customer in former trade. He further submitted that before the recommendation of the field force is accepted and approval were granted, the commitment of the doctors was obtained as to the quantum of prescription, he was giving in view of the sponsorship expenses to be incurred on him. According to the assessee, the expenses and sponsorship of the doctors and the expenditure incurred on the “Dermacon Conference”was admissible expenditure under section 37(1) of the Act. Regarding the expenses on spouse and family members of the doctors, the assessee submitted that when the doctors asked for sponsorship, they sometimes puts a condition that the company is to bear the expenses of his spouse including family and if that was not accepted by the company, the doctor stops prescription of the products of the company and therefore the expenditure was incurred as a result of business necessity and therefore an allowable expenditure.

4.3 The Assessing Officer was not convinced with the submission of the assessee and according to him entire expenses incurred on sales promotion were not toward the business purpose. In absence of any bifurcation of the expenses given by the assessee towards business and non-business purposes, the Assessing Officer estimated 50% of the total sales promotion expenses claimed by the assessee, as not incurred wholly and exclusively for the purpose of business and computed the of dis allowance amounting to Rs. 1,92,52,191/-. The Assessing Officer further observed that during the year the assessee paid the Fringe Benefit Tax (FBT) on Hotel lodging/boarding charges etc., accordingly, amount of FBT paid of Rs. 28,62,055/- was reduced out of the dis allowance amounting to Rs. 1,92,52,191/- and he made net dis allowance of Rs. 1,63,90,136/- out of the sales promotion expenses.

5. Before the learned CIT-(A), the assessee submitted details of “Dermacon Conference”expenses of Rs. 2,26,11,325/-, which is extracted as under:

6. The learned CIT-(A) noted the claim of the assessee in his decision on page 19 of the order that business thrives on recommendation of the doctors and due to prescription of companies product by the doctors, sales of the company had increased. The assessee also submitted that the sales representative of the assessee company regularly meets the doctor for generating more and more prescription for the company’s products and in view of that the company has to oblige doctors by sponsoring all their expenses regarding traveling, hotels lodging and fooding etc. The assessee claimed that if such obligations are not done, the doctor might not prescribe their products.

7. The Ld. CIT-(A) also observed that the assessee has filed copies of all the bills and address of the parties, to whom payment was made towards expenditure on Hotel booking, travel booking etc. The relevant finding of the Ld. CIT-(A) is reproduced as under:

“In support of these expenses, the appellant company has filed bills of hotels where the doctors had stayed, local conveyance expenses incurred, details of the payments made towards air  tickets, railway tickets and expenses incurred on food and lodging before the AO. During the course of appellant proceedings, the appellant also filed before me the copies of the bills through which the registration charges of Rs. 25,00,000/- were paid, name and address of the parties through whom the air and railway tickets were booked and mode of the payments. The appellant also gave name of the hotels where the arrangement for stay for doctors were made and number of rooms booked and the bill amount paid to such hotel at Hyderabad, Kochi and Delhi. All these payments have been made by CSA by way of cheques or credit cards. Further, the appellant has filed details of travel agents through whom taxis or buses were arranged at Hyderabad, Secunderabad. New Delhi and Cochin and the payments made by way of cheques. It has also filed details of cafeteria and other expenses incurred for the purposes of this ‘Dermacon Conference’. All these details are part of the paper book filed before me. The appellant also filed copy of bill through whom Dermacon conference invitations were printed. The copies of letters through whom the hotels were booked and certain copies of the hotel bills, duty slip of the taxis, details of the travel desks arranged to received doctors at airport and railway station and vice versa. All these evidences filed by the appellant before AO as well as before me substantially prove that these expenses were incurred by the appellant for promotion sales and sponsoring ‘Dermacon Conference’ at Hyderabad. The purpose of incurring these expensesand sponsoring Dermacon conference was to establish the brand image of the company as well as its products.”

8. Before the learned CIT-(A), the assessee submitted that it sales has increased due to sponsoring of doctors in the conferences. Further the assessee submitted that sales promotion expenses during the year under consideration are 7% of the sales whereas in the previous year such sales promotion expenses were 5% of the sales of the company and which has been allowed by the Assessing Officer. The assessee also submitted that company owns Derma products like ‘Tobibact’, ‘Nobifer’, ‘Essvit’, ‘Doloact’etc., which it gets manufactured through third parties and therefore sponsoring of the “Dermacon Conference”was with a view to establish those products in the market and generate more and more sales of the company’s product.

9. The Ld. CIT-(A) accepted the above submission of the assessee and held that expenses incurred by the assessee on sales promotion and sponsoring of “Dermacon Conference”were wholly and exclusively incurred for the purpose of business, and accordingly after referring few case laws, he deleted the dis allowance.

10. Before us, the Ld. Senior DR submitted that assessee has not provided the list of the doctors whose, hotel, air/ train travel and local cars was sponsored by the assessee company and in absence of which it was not possible for the Assessing Officer to verify that the expenses have been incurred wholly and exclusively for the purpose of business. He particularly raised the issue that payments to hotels at New Delhi, Kochi etc has been made, whereas the “Dermocon Conference” was organized at Hyderabad and therefore it was very much required to establish that those expenses were incurred wholly and exclusively for the purpose of business.

11. Further, he submitted that according to the guidelines of ‘Medical Council of India’(MCI) doctors were not authorized to avail such type of freebies in lieu of prescribing medicines to the patients. He accordingly submitted that the expenses incurred were in violation of the statutory provisions and therefore not allowed in view of the Explanation-1 to section 37 of the Act. In support he relied on the decision of the Hon’ble Punjab and Haryana High Court in the case of CIT Vs. Kap Scan and Diagnostic Center (P) Ltd., 25 taxmann.com 92, wherein the payment of commission to doctors for referring the taxpayer products was held against public policy and not allowable under section 37 of the Act.

12. On the other hand, the Ld. counsel relied on the finding of the Ld. CIT-(A) on the issue in dispute and submitted that expenses were incurred on hotel stay, air/railway travel and local car travel work towards sponsoring of doctors for the “Dermacon Conference”and incurring of those expenses was in the interest of the business of the assessee. The Ld. counsel filed a paper book containing pages 1 to 160 and referred to page 96 to 127 containing the name of three doctors (along with documentary evidence of expenses), for whom the assessee incurred expenses on air travel , hotels stay and local travel during “Dermacon Conference”at Hyderabad. The learned counsel also referred to page 146 to 147 of the paper book containing detail of expenses of Rs. 1.58 crores under the head sales promotion expenses, other than the “Dermacon Conference”at Hyderabad, which included annual charges of membership of various Association like Federation of Drug Traders, Andhra Pradesh (AP) (Rs. 3.90 Lacs), Maharashtra State chemical and druggist Association (Rs. 4.38 Lacs), all Kerala Chemist and Druggist Association (Rs. 25,000/-), National Integrated Medical Association (Rs. 48,000/-), Indian Association of Dermatologists (Rs.80,000/-). In view of the expenses mentioned, the Ld. counsel argued that sales promotion expenses were incurred wholly and exclusively for the purpose of business and allowable under section 37(1) of the Act.

13. We have heard the rival submission and perused the relevant material on record. The issue in dispute before us is whether the sales promotion expenses of Rs. 3.85 crores claimed by the assessee are in accordance with the provision of section 37 of the Act. The assessee has claimed expenses of Rs. 2.26 crores on “Dermacon Conference”at Hyderabad, which included expenses on the sponsoring of doctors as well as for registration and other advertising etc. during the conference. The assessee has also claimed expenses of Rs. 1.58 crores for sponsoring doctors for other conferences. The Ld. Senior DR has contested that 50% of the dis allowance out of the sales promotion expenses was justified due to the two reasons. First reason stated by him is that part of the expenses were not incurred wholly and exclusively for the purpose of business. The second reason that part of expenses incurred were in prohibition of the law. Whereas, on the other hand, the Ld. counsel has contested that the expenses incurred were wholly and exclusively for the purpose of business.

14. For adjudicating the issue in dispute, it is relevant to reproduce the section 37(1) of the Act along with Explanation-1 below the section:

“37. (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession“.

Explanation 1.—For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.

15. From plain reading of the provision, it is clear that for an expenditure to be allowable under section 37(1) of the Act, it is required that the expenditure is:

– incurred during the previous year concerned and

– not in the nature described under section 30 to 36 of the Act,

– not capital expenditure or

– not personal expenses of the assessee, but it should be

– laid out or expended wholly and exclusive for the purpose of business

16. There is no dispute that the expenditure was incurred in the previous year concerned. The expenditure and sales promotion expenses being neither described under section 30 to 36 of the Act nor capital expenditure or personal expenses of the assessee and therefore, the only condition to be examined is whether the expenses was laid out or expended wholly and exclusively for the purpose of business.

17. The assessee has given list of the expenses of Rs. 2.26 crores on “Dermacon Conference”, which have been reproduced by the Ld. CIT-(A) in the impugned order. On perusal of the said list, we find that payments of Rs. 25.00 lakhs has been made for registration of conference and balance expenses have been made towards booking of air tickets, train tickets, hotel bills, local travel cafeteria and other expenses. The dispute between the Revenue and the assessee is in respect of the expenses other than the registration expenses. The assessee has made payments to various agencies, like, ‘Vamadir Travels Agency’ for air Travels of ‘AK Tour and Travels’ for train travel, ‘CSA M/s Sri Sai Krichna’for hotels bookings etc. The payments made and bills produced before the lower authorities from the vendors certainly confirmed that expenses were incurred by the assessee company. But the issue whether the expenses incurred were wholly and exclusively for the purpose of business. The Assessing Officer asked for the list of the doctors who has availed services of air travels, hotel bookings and local travels etc. but the assessee did not provide any list such of doctors. On the contrary, the assessee provided list of the all the doctors who participated that conference. All the doctors who participated in the conference were not sponsored by the assessee and therefore the list provided by the assessee was not relevant for verifying the expenses incurred by the assessee. Thus the assessee has though claimed that the expenses were towards sponsoring of doctors but no documentary evidence in support of this claim or confirmation from any doctor of availing the services of the assessee of providing air travel, hotel booking or local car facility have been filed by the assessee before the Assessing Officer. The Ld. Senior DR raised the issue that expenses for booking of hotels and Local Car at New Delhi, Cochin and Kochi have also been claimed under the head “Dermacon Conference”at Hyderabad. The learned counsel could not justify before us as how those expenses were incurred wholly and extremely for the purpose of business. Ld. senior DR also raised the issue that along with doctors their family members also traveled and stayed in the hotels, which in any manner, cannot be treated as expenses incurred wholly and exclusively for the purpose of the business of the assessee. The Ld. counsel also could not justify as how the expenses incurred on the family members of the doctors were incurred wholly and exclusive for the purpose of business. The learned counsel has argued that participation in conference by the doctors has increased awareness of the product of company and expenses on sponsoring of the doctors has resulted into higher sales volume, thus expenses being an essential part of the business of the assessee, were incurred wholly and exclusive for the purpose of business. At this stage, we are not going into the issue whether the participation by the doctors in conference has generated awareness of the products and as a result of which the doctors prescribed more and more medicines of the assessee. We find that the assessee has not given the list of doctors sponsored by the assessee company. Before us, the assessee referred to page No. 96 of the paper book which contained name of three doctors and total expenditure on air travel, hotel booking and local conveyance of these three doctors is of Rs. 1,51,385/- only. No other list of doctors or their confirmations has been provided by the assessee either before the lower authorities or before us. Producing bills and vouchers of the parties to whom payments have been made, can establish that expenses were incurred but for establishing whether the expenses incurred are wholly and exclusively for the purpose of the business, the assessee was required to complete list of the doctors along with services availed by them, and the assessee has failed in discharging this onus. In absence of such a list, the Assessing Officer cannot verify that expenses were incurred on doctors only or incurred on their family members or other non-business persons. The assessee has failed to justify the expenses on hotels booking at New Delhi, Chochin or Kochi against “Dermacon Conference”at Hyderabad. In absence of required documentary evidence, in our opinion the dis allowance of 50% of the expenses for the sales promotion under section 37(1) of the Act was justified.

18. The second reason for dis allowance cited by the learned DR is the expenses being prohibited by the law. We find that according to Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation, 2002 (MCA Regulations) which have been amended by notification dated 10th of December 2009, prohibits medical practitioners from receiving any kind of gift, travel facilities, hospitality and any kind of cash or a monetary grants from the pharmaceutical healthcare industry. Further, we note that the CBDT in Circular No. 5/2012 dated 1/8/2012 clarified that freebees mentioned in the MCA Regulations being an expense prohibited by the law, the dis allowance shall be made in the hands of pharmaceutical industries also. We also note that in the case of CIT Vs. Kap Scan and Diagnostic Center (Pvt.) Ltd. (supra) that the assessee was a private limited company doing the business of CT Scan, Ultra Sound and X-rays and filed its return for the assessment year 1997-98 declaring loss of Rs. 24,40,650/-. During the assessment proceedings, it was found that the assessee had debited a sum of Rs. 3,68,400/- to the P&L account as expenditure on account of commission stated to have been paid to the practicing doctors who referred the patients to the assessee for various tests. The Assessing Officer vide order dated 31.12.1999 disallowed the claim of such commission to the assessee. The CIT-(A) and ITAT allowed the claim of the assessee. The question of law raised before the Hon’ble High Court by the Revenue in the case was as under:

“Whether, on the facts and in the circumstances of the case and in law, the ITAT was right in holding that the commission paid by the assessee to the doctors was allowable as it was in keeping with a trade practice and thus ignoring the fact that it was an illegal payment not allowable as per Explanation to section 37(1) of the Act?”

19. Hon’ble High Court held the commission paid by the assessee is against the public policy and reversed the order of the Tribunal. The finding of the Hon’ble High Court is reproduced as under:

“17. Now we proceed to examine whether soliciting of business by the assessee by paying commission to the private doctors is unethical, against public policy and forbidden by law.

18. Medical Council of India in exercise of powers conferred under Section 20A read with Section 33(m) of the Indian Medical Council Act, 1956 has made “The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulation, 2002 which describes Unethical Acts under Chapter 6 of the said regulations. Regulations 6.4 provides that no physician shall give, solicit, receive, or offer to give, solicit or receive, any gift gratuity, commission or bonus in consideration of a return for referring any patient for medical treatment. Regulation 6.4 reads thus:-

“6.4.1 A physician shall not give, solicit, or receive nor shall he offer to give solicit or receive, any gift, gratuity, commission or bonus in consideration of or return for the referring, recommending or procuring of any patient for medical, surgical or other treatment. A physician shall not directly or indirectly, participate in or be a party to act of division, transference, assignment, subordination, rebating, splitting or refunding of any fee for medical, surgical or other treatment.

6.4.2 Provisions of para 6.4.1 shall apply with equal force to the referring, recommending or procuring by a physician or any person, specimen or material for diagnostic purposes or other study/work. Nothing in this section, however, shall prohibit payment of salaries by a qualified physician to other duly qualified person rendering medical care under his supervision.”

19. If demanding of such commission was bad, paying it was equally bad. Both were privies to a wrong. Therefore, such commission paid to private doctors was opposed to public policy and should be discouraged. The payment of commission by the assessee for referring patients to it cannot by any stretch of imagination be accepted to be legal or as per public policy. Undoubtedly, it is not a  fair practice and has to be termed as against the public policy.

20. Further, Section 23 of the Contract Act equates an agreement or contract opposed to public policy, with an agreement or contract forbidden by law. Section 23 of the Contract Act reads thus:-

“23. What consideration and objects are lawful, and what not.- The consideration or object of an agreement is lawful, unless- it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.”

21. The judgments relied upon by the assessee cannot be of any assistance to the assessee as they are prior to insertion of Explanation to sub section (1) of Section 37 of the Act. Reference may also be made to the Apex Court Judgment in Dr. T.A. Quereshi’s case (supra) on which reliance has been placed by the learned counsel for the assessee. The Hon’ble Supreme Court in that case was seized of the matter where heroin forming part of the stock of the assessee’s trade was confiscated by the State authorities and the assessee claimed the same to be an allowable deduction. The Hon’ble Supreme Court held that seizure and confiscation of such stock in trade has to be allowed as a business loss and Explanation to Section 37 has nothing to do as that was not a case of business expenditure. Since the present case is not a case of business loss but of business expenditure, that judgment is distinguishable and does not help the assessee.

22. The issue with regard to the amount illegally paid to the police authorities for running their business came up for consideration before the Madhya Pradesh High Court in Gwalior Road Lines v. Commissioner of Income-tax, [1998] 234 ITR 230 (MP) wherein it was held that after insertion of Explanation to Section 37(1) by the Finance Act, 1998 w.e.f. 1.4.1962, the assessee could not claim such payment as expended for commercial exigency and, therefore, the same was not an allowable deduction.

23. Allahabad High Court in Pt. Vishwanath Sharma’s case (supra) while considering the issue relating to commission paid to Government doctors for prescribing assessee’s medicines to patients held it to be contravening public policy and an inadmissible expenditure. However, no distinction can be made in respect of Government doctors and private doctors as has been canvassed by the learned counsel for the assessee.

24. Thus, the Commission paid to private doctors for referring patients for diagnosis could not be allowed as a business expenditure. The amount which can be allowed as business expenditure has to be legitimate and not unlawful and against public policy.

25. Consequently, the order passed by CIT(A) and the Tribunal whereby deduction had been allowed to the assessee cannot be sustained.”

20. In the instant case also the assessee has argued before the lower authorities that commitment from the doctors are obtained as to the quantum of prescription he was giving in view of the sponsorship expenses to be incurred by the assessee on him. For clarifying, how the assessee is justifying the expenses, one para of the submission of the assessee reproduced in the order of the Ld. CIT-(A) on page 5, is extracted below:

“3) It is submitted with respect that the amount incurred on account of Derma Conference of the Doctors is by way of commercial obligation in the business emanating from an express of implied contract. The reason is obvious that the assesses Company is spending this amount with the expectation that the Doctors shall prescribe its product more often. This express or implied contract emerges from the long standing custom in this pharma trade. It is difficult to quote a solitary case where company is not incurring this kind of expenditure but still getting the prescription from the doctors. Because of the long standing customary practice in the trade, any at, done in pursuance to the discharge of such obligation is a legitimate allowable expenditure. Though, there is no legal obligation on the doctors to prescribe the product but it is a moral obligation for the doctors to honors its commitment to prescribe the product of the company as the company had sponsored their conference.”

21. Providing free air travel, stay and food in hotels, local car conveyance etc. for prescribing medicines of the assessee is akin to giving commission and certainly in contravention of the public policy. Thus, respectfully following the decision of the Hon’ble Punjab and Haryana High Court in the case of CIT Vs. Kap Scan and diagnostics Centre (p) Ltd (supra), the 50% expenses out of the sales promotion expenses disallowed by the Assessing Officer was justified. Here we find that the expenses toward sponsoring to doctors appears to be exceeding 50% of the sales promotion expenses and therefore the Assessing Officer is more than liberal in disallowing 50% of the sales promotion expenses of the assessee.

22. In view of above, we set aside the order of learned CIT(A) on the issue in dispute and reverse the finding of the learned CIT-(A) and restore the order of the Assessing Officer. The grounds of appeal raised by the Revenue are allowed.