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“freebies to doctors”

Business ExpensesSection 37 ExplanationSection 37 Explanation50 judgments

The decision most relied on for freebies to doctors is Apex Laboratories Pvt. Ltd. v. CIT (135 Taxmann.com 286), cited in 148 judgments on BharatTax.

Leading authorities on freebies to doctors

Apex Laboratories Pvt. Ltd. v. CIT
135 Taxmann.com 286 · 2022 · Supreme Court
148
citing judgments

Expenditure incurred by pharmaceutical companies on freebies provided to medical practitioners is not deductible under Explanation 1 to Section 37(1) of the Income-tax Act, as such gifting is prohibited by the Medical Council Regulations, 2002. The court also held that what is directly prohibited by law cannot be indirectly evaded through contrivance.

CIT v. Kap Scan and Diagnostic Centre (P.) Ltd.
344 ITR 476 · 2012 · High Court
58
citing judgments

Payment of commission to doctors for referring patients to diagnostic centers or providing gifts, freebies, or hospitality to medical practitioners by pharmaceutical companies is against public policy and cannot be allowed as a business expenditure under Section 37(1). Demanding such benefits is unethical on the part of doctors, and paying them is equally unethical on the part of companies.

Dy. CIT v. PHL Pharma (P.) Ltd.
78 Taxmann.com 36 · 2017 · ITAT
38
citing judgments

Pharmaceutical companies are not subject to the Medical Council of India (MCI) guidelines concerning freebies given to doctors. Consequently, expenses on such freebies are not disallowed under Explanation 1 to Section 37(1) of the Income Tax Act.

1. M/s. Solvay Pharma India Ltd. v. PCIT
89 Taxmann.com 249 · 2018 · ITAT
12
citing judgments

Expenditure incurred by pharmaceutical companies providing gifts or freebies to doctors is not deductible if it violates MCI Regulations.

Judgments citing freebies to doctors

M/S. Medley Pharmaceuticals Ltd., Mumbai vs. Dy Comm of Income Tax-10(2)(2), Mumbai

In the result, all the appeals of the assessee are partly allowed and all the appeals of the Revenue are dismissed

ITA 293/MUM/2023[2014-15]Status: DisposedITAT Mumbai28 Jun 2023AY 2014-15
Section 14ASection 33Section 35Section 80I

Medley Pharmaceuticals Ltd  Assessee manufactures and sells pharma products which can be sold only when it is prescribed by medical practitioners.  Giving of freebies to doctors and its admissibility of such expense can be determined by the law of the land..  MCI in exercise of powers confirmed by section

M/S. Medley Pharmaceuticals Ltd., Mumbai vs. Dy Comm of Income Tax-10(2)(2), Mumbai

In the result, all the appeals of the assessee are partly allowed and all the appeals of the Revenue are dismissed

ITA 292/MUM/2023[2018-19]Status: DisposedITAT Mumbai28 Jun 2023AY 2018-19
Section 14ASection 33Section 35Section 80I

Medley Pharmaceuticals Ltd  Assessee manufactures and sells pharma products which can be sold only when it is prescribed by medical practitioners.  Giving of freebies to doctors and its admissibility of such expense can be determined by the law of the land..  MCI in exercise of powers confirmed by section

M/S. Medley Pharmaceuticals Ltd., Mumbai vs. Dy Comm of Income Tax-10(2)(2), Mumbai

In the result, all the appeals of the assessee are partly allowed and all the appeals of the Revenue are dismissed

ITA 291/MUM/2023[2016-17]Status: DisposedITAT Mumbai28 Jun 2023AY 2016-17
Section 14ASection 33Section 35Section 80I

Medley Pharmaceuticals Ltd  Assessee manufactures and sells pharma products which can be sold only when it is prescribed by medical practitioners.  Giving of freebies to doctors and its admissibility of such expense can be determined by the law of the land..  MCI in exercise of powers confirmed by section

M/S. Medley Pharmaceuticals Ltd., Mumbai vs. Dy Comm. of Income Tax-10(2)(2), Mumbai

In the result, all the appeals of the assessee are partly allowed and all the appeals of the Revenue are dismissed

ITA 290/MUM/2023[2013-14]Status: DisposedITAT Mumbai28 Jun 2023AY 2013-14
Section 14ASection 33Section 35Section 80I

Medley Pharmaceuticals Ltd  Assessee manufactures and sells pharma products which can be sold only when it is prescribed by medical practitioners.  Giving of freebies to doctors and its admissibility of such expense can be determined by the law of the land..  MCI in exercise of powers confirmed by section

M/S. Medley Pharmaceuticals Ltd., Mumbai vs. Dy Comm. of Income Tax-10(2)(2), Mumbai

In the result, all the appeals of the assessee are partly allowed and all the appeals of the Revenue are dismissed

ITA 289/MUM/2023[2015-16]Status: DisposedITAT Mumbai28 Jun 2023AY 2015-16
Section 14ASection 33Section 35Section 80I

Medley Pharmaceuticals Ltd  Assessee manufactures and sells pharma products which can be sold only when it is prescribed by medical practitioners.  Giving of freebies to doctors and its admissibility of such expense can be determined by the law of the land..  MCI in exercise of powers confirmed by section

Usv P. Ltd., Mumbai vs. Dy CIT-C-5(2), Mumbai

In the result, appeal filed by the assessee and appeal filed by the revenue are partly allowed

ITA 891/MUM/2021[2018-19]Status: DisposedITAT Mumbai20 Jun 2023AY 2018-19

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms. Kavitha Rajagopal, Hon’Blem/S. Usv Private Limited V. Dcit, Central Circle- 5(2) Arvind Vitthal Gandhi Chowk 1908, 19Th Floor Govandi (East), Mumbai- 400088 Air India Building Nariman Point, Mumbai- 400021 Pan: Aaacu1366N (Appellant) (Respondent) Dcit, Central Circle- 5(2) V. M/S. Usv Private Limited 1908, 19Th Floor Arvind Vitthal Gandhi Chowk Air India Building, Nariman Point Govandi (East), Mumbai- 400088 Mumbai- 400021 Pan: Aaacu1366N

Section 132Section 132(4)Section 143(3)Section 245CSection 35Section 37Section 37(1)

facts and circumstances of the case and in law. whether the Ld.CIT(A) has erred in restricting the disallowance on account of freebies to doctors to Rs. 1,00,66,601/- from Rs.6,68,10,499/- made by the assessing officer, in an adhoc manner without any reasoning and ignoring

Cipla Limited, Mumbai vs. DCIT, CC- 1(2), Mumbai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed

ITA 2732/MUM/2018[2011-12]Status: DisposedITAT Mumbai23 Dec 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Dy. Cit, Central Circle-1(2) M/S. Cipla Ltd. Mumbai-400 020 Vs. 289, Bellasis Road, Mumbai Central, Mumbai-400 008 Pan/Gir No. Aaacc 1450 B (Revenue) : (Assessee) M/S. Cipla Ltd. Dy. Cit, Central Circle-1(2) 289, Bellasis Road, Mumbai Central, Vs. Mumbai-400 020 Mumbai-400 008 Pan/Gir No. Aaacc 1450 B : (Assessee) (Revenue) Assessee By : Shri Hemen Chandariya Revenue By : Smt. Mahita Nair Date Of Hearing : 30.09.2022 Date Of Pronouncement : 23.12.2022

For Appellant: Shri Hemen ChandariyaFor Respondent: Smt. Mahita Nair
Section 133ASection 142(1)Section 143(2)Section 143(3)Section 250

Civil) No. 23207 of 2019), the relevant portion of which is reproduced below for ease of ready reference: 33. Thus, pharmaceutical companies’ gifting freebies to doctors, etc. is clearly “prohibited by law”, and not allowed to be claimed as a deduction under Section 37(1). Doing so would wholly undermine

DCIT CC-1(2), Mumbai vs. Cipla Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed and the appeal filed

ITA 2639/MUM/2018[2011-12]Status: DisposedITAT Mumbai23 Dec 2022AY 2011-12

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Dy. Cit, Central Circle-1(2) M/S. Cipla Ltd. Mumbai-400 020 Vs. 289, Bellasis Road, Mumbai Central, Mumbai-400 008 Pan/Gir No. Aaacc 1450 B (Revenue) : (Assessee) M/S. Cipla Ltd. Dy. Cit, Central Circle-1(2) 289, Bellasis Road, Mumbai Central, Vs. Mumbai-400 020 Mumbai-400 008 Pan/Gir No. Aaacc 1450 B : (Assessee) (Revenue) Assessee By : Shri Hemen Chandariya Revenue By : Smt. Mahita Nair Date Of Hearing : 30.09.2022 Date Of Pronouncement : 23.12.2022

For Appellant: Shri Hemen ChandariyaFor Respondent: Smt. Mahita Nair
Section 133ASection 142(1)Section 143(2)Section 143(3)Section 250

Civil) No. 23207 of 2019), the relevant portion of which is reproduced below for ease of ready reference: 33. Thus, pharmaceutical companies’ gifting freebies to doctors, etc. is clearly “prohibited by law”, and not allowed to be claimed as a deduction under Section 37(1). Doing so would wholly undermine

M/S Astrazeneca Pharma India Limited, Bangalore vs. The Deputy Commissioner of Income Tax Large Tax Payers Unit (Ltu) Circle-1, Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 3250/BANG/2018[2014-15]Status: DisposedITAT Bangalore15 Dec 2022AY 2014-15

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.3250/Bang/2018 Assessment Year: 2014-15

For Appellant: Shri Nageswar Rao, A.RFor Respondent: Smt. Susan D. George, D.R
Section 143(3)Section 154Section 80G

companies. 4.4 Ld. AO/DRP have erred, in law and in facts, in considering the travel and conveyance. selling. marketing and distribution expenses as freebies to doctors when such expenses were incurred wholly for the purpose of business and not for the purpose which is prohibited by law. 4.5 Ld. AO/DRP ... AO/DRP have erred, in law and in facts, in considering the travel and conveyance. selling. marketing and distribution expenses as freebies to doctors when such expenses were incurred wholly for the purpose of business and not for the purpose which is prohibited by law. 4.5 Ld. AO/DRP have erred

M/S. Himalaya Wellness Company (Formerly Known As the Himalaya Drug Company), Bengaluru vs. The Deputy Commissioner of Income Tax, Circle- 6(1)(1), Bengaluru

In the result, the appeal filed by the assessee is partly allowed for statistical purpose

ITA 259/BANG/2022[2017-18]Status: DisposedITAT Bangalore14 Jun 2022AY 2017-18

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.259/Bang/2022 : Asst.Year 2017-2018 M/S.Himalaya Wellness Company The Deputy Commissioner Of (Formerly Known As The Himalaya Income-Tax, Circle 6(1)(1) V. Bengaluru. Drug Company), Makali, Tumkur Road Bengaluru – 562 162. Pan : Aadft3025B. (Appellant) (Respondent)

For Appellant: Sri.Padamchand Kincha, CAFor Respondent: Sri.Sumer Singh Meena, CIT -DR
Section 143(1)Section 143(2)Section 143(3)Section 144C(5)Section 2(11)Section 92C

supplied) The 2002 Regulations, applicable to all medical practitioners (including doctors in private practice), was introduced w.e.f. 14.12.2009. 33. Thus, pharmaceutical companies’ gifting freebies to doctors, etc. is clearly “prohibited by law”, and not allowed to be claimed as a deduction under Section 37(1). Doing so would wholly undermine