Case Law Details
Brief of the Case
ITAT Delhi held In the case of Eli Lilly & Co. (India) Pvt. Ltd. vs, ACIT that a clear distinction has been made between the free samples, gifts, travel facilities, hospitality and cash or monetary grants. It would accordingly be incorrect to put samples in the definition of gifts being separately categorized in Para 5 & 6 of the Uniform Code of Pharmaceutical Marketing Ethics (UCPMP) respectively. It is noticed from the CBDT Circular No. 5/2012 that it refers the IMC Regulations 2002 which imposed a provision on the medical practitioner for taking any gift, travel facility, hospitality, cash and medical grant from the pharma sector. Also the Drugs and Cosmetics Act and regulations made there under do not prohibit the licensee or a medical practitioner to distribute the free samples, albeit following prescribed conditions. Hence free samples are not covered by the IMC regulations of 2002 (as amended in 2009) read with CBDT circular no. 5/2012, UCPMP and the Drugs and Cosmetic Act and regulations made there under.
Facts of the Case
The assessee is a wholly owned subsidiary of Eli Lilly Netherlands B.V. and engaged in the business of trading of formulations in the domestic market which is purchased from its AE’s and third parties. It is also into marketing and selling of life saving drugs formulations that find usage in the treatment of several disease segments ranging from Oncology, CNS, Cardiovascular, Cancer, Infectious diseases, Endocrine, etc. The assessee filed its return of income on 13.10.2010 declaring an income of Rs. 16,75,13,196/- which came to be assessed at an income of Rs. 23,06,18,730/- in an order dated 12.1.2015 u/s 144C/143(3) and hence this appeal by appellant Company.
Disallowance under section 37(1)
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