Case Law Details
Procter & Gamble Health Limited Vs ACIT (ITAT Mumbai)
Undisputedly, the assessing officer had disallowed 50% of the total cost incurred by the assessee towards free samples in the relevant assessment years. Whereas, simply relying upon the decision of the learned DRP in assessment year 2013-14, learned Commissioner (Appeals) has restricted the disallowance to 20% of the cost incurred. Admittedly, against the aforesaid decision of learned Commissioner (Appeals), the revenue has not preferred any appeal. Be that as it may, the respective orders of learned departmental authorities clearly indicate that the disallowance was made purely on estimate basis. The assessing officer has accepted the fact that the assessee had produced before him the details with regard to names of the doctors and their addresses. He has disallowed 50% out of the expenditure saying that in some instances names and address are incomplete. However, the assessing officer has not referred to any such specific instance. On the contrary, on perusal of documents furnished in the paper book, we have noticed that the assessee had furnished the details of free samples along with their quantity and cost. Further, the assessee has also furnished the details of chemists’ shop to which samples have been given. Additionally, the assessee has furnished the list of doctors / medical practitioners with their qualification, the field of practice, detailed address with PIN code.
It is a fact that the assessee personally does not go and distribute free samples to doctors / medical practitioners. Rather, the assessee has appointed a number of marketing representatives to physically visit doctors / medical practitioners to distribute the samples. Therefore, even accepting that the complete address of medical practitioners are not available in few instances, that by itself cannot be a reason to make the disallowance when the departmental authorities have accepted that distribution of free samples is a regular business practice and in fact, have not raised any doubt regarding the genuineness of the expenditure. Thus, when the assessee has furnished the required details relating to the expenditure claimed, there is no justifiable reason to disallow even a part of it.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Captioned appeals by the same assessee arise out of three separate orders, all dated 26-02-2020, of learned Commissioner of Income Tax (Appeals)-57, Mumbai for the assessment years, 2004-05, 2005-06 and 2006-07.
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