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TMI Blog2016 (1) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ce could be created mainly by the medical practitioners, when they use such medicines towards treatment of the patients. Moreover, the real person who can create market for medicines are the medical practitioners and when compared to other industrial products, medicines are not ordinary products of consumption and its consumption is for only to get rid of some ailments. Reputation of such medicines would have to be confirmed by the medical practitioners and, therefore, the samples of medicines were distributed to them. In brief, distribution of samples of medicines to the physicians free of cost cannot be parted with the business conducted by the assessee. Section 37(1) of the Act speaks about the expenditure incurred for the purpose of bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per: Amarjit Singh: These two cross appeals, one by the Revenue being ITA No.5159/Mum/2013 and the other by the assessee being ITA No.5107/Mum/2013 by the assessee are directed against the order of the learned Commissioner of Income Tax (Appeals)-19, Mumbai [hereinafter referred to as "the CIT(A)] dated 03-05-2013 passed in appeal No. CIT(A)-19/ACIT-9(1)/IT.77/2012-13 for the assessment year 2010-11 and these appeals are being taken up together for adjudication for the sake convenience, having common question of law and facts involved therein. 2. The assessee filed return of income for the assessment year 2010-11 declaring total at loss to the tune of ₹ 8,11,543/-. The assessee has shown book profit at ₹ 1,15,95,750/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action is wrong in law and facts of the case and on that basis he submitted that the present appeal may be allowed by setting aside the order of the learned CIT(A). 4. On the other hand, the learned Authorized Representative [hereinafter referred to as "the AR"] for the assessee argued that the AO has wrongly disallowed the expenditure incurred on account of distribution of samples of medicines which is required to be allowed in view of the provisions of section 37(1) of the Act; therefore, in this regard the order of the learned CIT(A) is also wrong, against the law and facts of the case. He submitted that the disallowance of expenses made in computing total income under normal provision of the Act are not required to be added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89 ESKAYEF Vs CIT (SC). No doubt, the said law has been settled for the purpose of section 37(3A) which has now been deleted by the Finance Act, 1985 with effect from 01-04-1986. In the said law, the expenditure incurred on distribution of samples of medicines for the purpose of publicity or sale promotion was held to be allowed within the ambit of section 37(3A) and the said sub-section was subject to the limitation as to the allowability therein contained. No doubt, after deletion of the said sub-section, it is required to be seen whether the case of the assessee falls within the purview of section 37 of the Act or not. Distribution of samples of medicines to the physicians free of cost cannot be parted with the business purpose, as the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT(A) is hereby set aside in this regard and the file is hereby order to restore before Assessing Officer to reassess the assessment of assessee in view of the above said observations. 6. The next issue contested in assessee's appeal relates to the inclusion of amount disallowed u/s 14A of the Act to the book profit. This issue is decided against the assessee by Hon'ble Delhi High Court in the case of CIT vs. Goetze India Ltd. (ITA No.1179/2010 & ITA 1306/2010 dated 09.12.2013). Accordingly, we uphold the order of learned CIT(A) on this issue. 7. The disallowance of expenses made while computing total income under normal provision of the Act have not been prescribed to be included under the provision of section 115JB ..... X X X X Extracts X X X X X X X X Extracts X X X X
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