DAHYABHAI LALJIBHAI PATEL,MEHSANA vs. THE ITO, WARD-1, MEHSANA
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the assessee against the order passed by the Ld.
Commissioner of Income
Tax
(Appeals)/National Faceless Appeal Centre, Delhi, vide order dated
23.07.2025 relevant to the Assessment Year 2018-19. 2. The assessee has raised the following grounds of appeal:
1. The Ld. CIT(A) has erred in law and on facts of the case, in sustaining the disallowance of Rs.25,88,504/- made by way of restriction of sales promotion/distribution expenses paid to Welable Pharma, from 13.5% to 5% of sales.
Asst. Year : 2018-19
- 2–
The appellant craves leave to add, amend alter or delete the grounds of appeal at the time of hearing, if need arise. 3. The Assessing Officer disallowed the expenditure incurred by the assessee on the ground that the same was beyond the market limit. We have examined the details of the compensation paid to Welable Pharma, the particulars of which are as under: Compensation given to Welable Pharma Financial Year
Sales of assesser's products by Welable
Pharma
Purchases of assessee's products by Welable
Pharma
Gross Margin before credit notes (in Rs.)
Gross Margin before credit notes (in %)
Compensation by way of credit
Sales
Promotion after credit notes Expense by assessee
(in %)
Total
Compensation after credit notes (in%)
2014-15
3,91,18,821
2,79,49,780
1,11,69,041
55%
0%
55%
2015-16
3,43,21,070
2,73,28,092
69,92,978
38%
0%
38%
2016-17
4,12.33,056
3,34,10,836
78,22,222
97%
5%
97%
2017-18
3,57,79,620
3,04,52,988
53,26,632
89%
50%
39%
Considering the consistent method followed by the assessee, we find no reason to interfere with the profit declared. Accordingly, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open Court on 08.10.2025. (SUCHITRA KAMBLE)
VICE-PRESIDENT
()
Ahmedabad; Dated 08.10.2025
MV
Asst. Year : 2018-19
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आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to :
अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधतआयकरआयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file.
आदेशानुसार/ BY ORDER,सहायक पंजीकार (Dy./Asstt.