ASST COMMISSIONER OF INCOME TAX CEN CIR 7(2), MUMBAI, MUMBAI vs. HEGDE AND HEGDE PHARMACEUTICA LLP, MUMBAI

ITA 2438/MUM/2024Status: DisposedITAT Mumbai08 November 2024AY 2017-18Bench: SHRI B.R. BASKARAN (Accountant Member), SHRI SUNIL KUMAR SINGH (Judicial Member)40 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that conference registration charges paid by the pharmaceutical company on behalf of doctors are to be treated as 'freebies' and are not allowable as a deduction under Section 37(1) of the IT Act. The decision of the Supreme Court in Apex Laboratories was considered binding.

What were the facts?

The assessee, a pharmaceutical company, incurred expenses on freebies to medical professionals, including survey fees, conference registration, and distribution of scientific books. The Assessing Officer disallowed these expenses, considering them in violation of MCI guidelines and Section 37(1) of the IT Act. The CIT(A) confirmed the disallowance for conference registration expenses but deleted others.

What were the issues?

Whether expenses incurred by a pharmaceutical company for conference registration fees paid on behalf of doctors are allowable as a business deduction under Section 37(1) of the IT Act, considering them as freebies.

Which sections of the Income-tax Act were involved?

Section 37(1)

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Income Tax Appellate Tribunal, MUMBAI “E” BENCH : MUMBAI

Before: SHRI B.R. BASKARAN & SHRI SUNIL KUMAR SINGH

For Appellant: Shri Jaiprakash Bairagra, a/w, Ms. Rupa Nanda
For Respondent: Shri Biswanath Das, CIT-DR
Hearing: 05/09/2024Pronounced: 08/11/2024

PER BENCH :

These cross appeals are related to AY 2016-17 to 2022-23 and

The order continues below.

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