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TMI Blog2015 (3) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... r stock statement given to the Bank and Stock as appearing in the Balance Sheet - Held that:- Assessee showed stock of ₹ 8,75.59 lakhs at the year end to the Bank, whereas subsequent to tax audit, the assessee disclosed closing stock valued at 858.48 lakhs difference being 17.11 lakhs. We find that the assessee has submitted the stock value at the end of the month end with the Bank before 15th of the next month. Accordingly, assessee has filed the stock statement giving value as at 31-03-2010 which was worked out on the basis of cost sheet as at 31st December, 2009. However, while finalising the Accounts as per the costs sheets as at 31st December, 2010 and the valued the stocks which is slightly higher than the earlier value informed to the Bank. While finalising the Accounts for 2009-10, the assessee has write off stocks of Playmax valuing ₹ 51.54 lakhs since the same has expired but was shown in the stock statement submitted to the Bank on 15.04.2010. The stock value on 31st March, 2010 was further reduced at the time of finalisation of Accounts to the extent of ₹ 1.71 lacks for the stock of expired goods. The CIT(A) has verified and he was of the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee was given show cause notice and after considering the reply, the AO disallowed the amount of ₹ 87,62,377/-. 3.2. The matter carried to CIT(A) and CIT(A) has allowed the claim by observing as under: Facts during the instant year is identical to 2007-08 and 2008-09, wherein Hon'ble ITAT has confirmed the order of the CIT(A) restricting the disallowance to 5% of the total sales promotion expenses. During the course of appellate proceedings, the sales promotion expenses were verified and the same were discussed with the ARs of the appellant company. During verification of sales promotion expenses Shri Pradeep Kulkarni, FCA, AR and Shri. R.S. Kholkar, company Secretary of the appellant company, on the basis of the facts, requested that disallowance be enhanced to 10% of total sales promotion expenses in place of 5%; which was found to be acceptable. The total sales promotion expenses claimed are ₹ 1,93,37,578/-. Therefore, the disallowance offered @ 10% works out to ₹ 19,33,758/-. The A.O. is directed to restrict the disallowance at ₹ 19,33,758/- and balance addition is deleted. This Ground of Appeal of the appellant is partly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the medicine manufactured by the assessee, the assessee will not be able to sell the products. It is not a case where the AO have disputed the genuinety of the expenditure. Under these facts we agree with the order of the CIT (A) on this issue. We accordingly confirm the order of the CIT (A) by dismissing the ground taken by the revenue as well by the assessee in the both the assessment years in this issue. We have gone through the Circular No. 5/2012, Ministry of Finance Department of Revenue, Govt. of India wherein the CBDT has clarified the admissibility of expenses incurred in providing free bees to the Medical Practitioner by Pharmaceutical and allied health section industries. By that circular the medical practitioner and their professional associates are being prohibited from taking any gift, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied health sector industries. Moreover, any facilities given to Medical Profession or Medical practitioner are not allowed, therefore, this circular is applicable to that relevant facts but in the instant case each case has to be verified in respect of expenditure, which company has debited as sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stated that the difference arose as the statements submitted to bank on 15/04/2010 were only provisional and estimates. It is only at the time of audit that the figures are finalised and provision is made for obsolete stock/write-off/valuation etc. due to which there is bound to be some differences. The appellant also submitted a reconciliation statement of closing stock as submitted to Bank and as per their books. Apart from the above, they placed reliance on the decision in the case of CIT V/s Riddhi steel and Tubes Pvt. Ltd. 8.4. I have gone through the assessment order and the submission of the appellant. The assessee showed a stock of ₹ 8,75.59 lakhs at the year end to the Bank, whereas subsequent to tax audit, the assessee disclosed closing stock valued at 858.48 lakhs, difference being 17.11 lakhs, which works to be less than 2% aberration. I have also gone through the reconciliation statement submitted by the appellant. The major difference is because of the expired medicine, which was declared to the Bank, but at the time of finalization of accounts, the same was written off. This item alone is responsible for a difference of ₹ 51.54 lakhs. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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