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TMI Blog2022 (10) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... AO had duly applied his mind on this issue and the records of the various assessment proceedings, both in the original and in search assessment, bear testimony to the fact that, no Freebies/Gifts have been given to the Medical Practitioners/Doctors and that such gifts were only given to the Stockists/Distributors of the company as is evident from the various promotional schemes launched by the assessee company in different years. It would be relevant here to refer to the judgment of CIT vs. Sunbeam Auto [ 2009 (9) TMI 633 - DELHI HIGH COURT] wherein has held that the distinction between the lack of enquiry and inadequate enquiry has to be considered and it has been held that if there was an enquiry, howsoever inadequate that would not give occasion to the Commissioner, who passed an order u/s 263 of the Act, just because he has a different opinion in the matter and under such circumstances, it was held that the assessment cannot be held to be as erroneous and prejudicial to the interest of the revenue. Once there is an application of mind and enquiry has been made by the AO, then in such circumstances, the assessment cannot be branded as erroneous and prejudicial to the interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or was prohibited under the law. 3.0 At the request of the Ld. AR, ITA No. 345/Chd/2022 pertaining to AY 2010-11 was taken as the lead case. The brief facts of the case in Assessment Year 2010-11 are that the assessee is a limited company and for the year under consideration, the return of income was filed declaring income at Rs. 2,51,98,090/-. A search and seizure operation u/s 132(1) of the Act was carried out at the business premises of the assessee company on 23.03.2018. In view of the search having been carried out, the assessee's case was reopened after recording of reasons and recording of satisfaction and notice u/s 153A of the Act was issued. In response to the said notice the assessee submitted that the original return filed may be treated as the return filed in response to the notice issued u/s 153A of the Act. The assessment u/s 153A was completed after making an addition Rs. 52,03,425/- on account of difference in valuation in the construction of the office-cum- godown building of the assessee company. 3.1 Thereafter, the Ld. PCIT Ludhiana issued notice u/s 263 of the Act on the reasoning that the expenditure on account of business promotion was not allowable u/s 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Ld. PCIT (Central), Ludhiana having noted the fact from the assessment file that no expenditure was incurred on account of any gifts/ freebis to the doctors/medical professional and the Assessing Officer, also having applied mind on the same issue, both during the course of original assessment u/s 143(3) and the assessment u/s 153A/143(3), the setting-aside of the assessment as framed, after due application of mind by the AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the directors. It was submitted that this surrender was also duly disclosed in the return of income and tax at the rate of 78% u/s 115BBE of the Act was also paid by the company as well as the director. It was further submitted that further some additions were also made in the assessments framed u/s 153A of the Act but the assessee did not enter into any litigation but settled the dispute by availing the benefit of the 'Vivad se Vishvas Scheme'. 4.2 It was submitted that subsequent to all this, the Ld. PCIT, Ludhiana proceeded to issue show cause notices u/s 263 of the Act for AY 2008-09 to AY 2018-19 on almost identical reasoning and wordings and the main reason for the issuance of the show cause notices was that as per the Ld. PCIT, the assessee's claim of business promotion expenses in the profit and loss account was not an allowable expenditure in terms of the Explanation to section 37(1) of the Act. He drew our attention to the copy of the show cause notice for AY 2010-11 wherein, the main issue raised by the Ld. PCIT has been highlighted in paragraph 2 as under:- "The assessee is in the business of manufacturing and distribution of medicine. In this industry/t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional issue relating to transfer pricing. The Ld. AR submitted that on the issue of allowbililty of business promotion expenditure and on the issue of whether or not the AO had made relevant and proper inquiries, his arguments were also going to be identical. 5.0 However, for the sake of completeness, the grounds raised by the assessee in all the other appeals are also being reproduced herein under:- 343/Chd/2022 (A.Y. 2008-09) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. 2. That the order as passed by the Ld. PCIT (Central), Ludhiana is void-ab-initio since, while passing the order, the Ld. PCIT has not held that the assessment as framed by the Assessing Officer vide order dated 30.12.2019, is erroneous and prejudicial to the interest of revenue and having not satisfied the basic condition, for cancelling the valid assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 344/Chd/2022 (A.Y. 2009-10) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019 to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. 2. That the order as passed by the Ld. PCIT (Central), Ludhiana is void-ab-initio since, while passing the order, the Ld. PCIT has not hel. that the assessment as framed by the Assessing Officer vide order dated 30.12.2019, is erroneous and prejudicial to the interest of reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 346/Chd/2022 (2011-12) 1. That the Ld.. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019 to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. 2. That the order as passed by the Ld.. PCIT (Central), Ludhiana is void-ab-initio since, while passing the order, the Ld.. PCIT has not held that the assessment as framed by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 347/Chd/2022(A.Y. 2012-13) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019 to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. 2. That the order as passed by the Ld.. PCIT (Central), Ludhiana is void-ab-initio since, whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 348/Chd/2022(A.Y. 2013-14) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019 to the file of the Assessing Officer, with the direction to pass the assessment order, afresh in accordance with law, after granting sufficient opportunity to the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 349/Chd/2022 (A.Y. 2014-15) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dated 30.12.2019 to the file of the Assessing Officer, with the direction to pass the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 350/Chd/2022(A.Y. 2015-16) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income Tax Act, 1961 and, thereby, cancelling the assessment already framed by the AO vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 351/Chd/2022(A.Y. 2016-17) 1. That the Ld. PCIT (Central), Ludhiana has erred in assuming the jurisdiction to issue notice u/s 263 of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. Notwithstanding with the above said grounds of appeal, the Ld.. PCIT (Central), Ludhiana has wrongly assumed the jurisdiction u/s 263 on the basis of the audit objection, which was not accepted by the department and no valid jurisdiction could have been assumed by the Ld.. PCIT (Central), Ludhiana on the basis of audit objection as per the binding judgment of the Jurisdictional Bench of the ITAT, Chandigarh Bench and of the Hon'ble Punjab & Haryana High Court. 8. That the appellant craves leave to add, amend, alter any of the above grounds during the appellate proceedings have been considered. 352/Chd/2022(A.Y. 2017-18) 1. That the Ld. PCIT (Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and of the Apex Court judgment is improper. 7. That the Ld.. PCIT (Central), Ludhiana has erred in setting-aside the issue to the file of the Assessing Officer on the issue of nonmaking of TP reference as per his finding in para 6.2 of the order, without considering the facts that in the case of the other concern, for which, the TP reference was made i.e. 'All Kind Healthcare Unit', TP reference had been made, no adverse order was passed by the TPO and, therefore it wouLd. be futile exercise to set-aside the case to the file of the AO on this issue. 8. Notwithstanding with the above said grounds of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed, after due application of mind by the AO, is against the facts & circumstances of the case and the settled law on the subject. 5. That the Ld.. PCIT (Central), Ludhiana has erred in holding that there was 'lack of enquiry' on the issue of gifts/freebis, as it has been categorically stated that there was no such gifts/freebis to the doctors as per the assessment records of the assessee and, thus, the cancellation of the assessment, already framed vide order dated 30.12.2019, after due application of mind by the Ld.. Assessing Officer is wholly improper. 6. That the Ld.. PCIT (Central), Ludhiana has wrongly referred to the 'Medical Counsel Regulation Act, 2002' and also to the CBDT Circular No. 5 of 2012 dated 01.08.2012 and the judgment of the 'Apex Court' in the case of 'Apex Laboratories Pvt. Ltd.' in para 5.8 of the order, regarding the provision by law of the gifts/freebis to the medical practitioner, since it is an accepted fact and borne out from the assessment records of the assessee, that no such gifts/freebis had been given to the medical practitioners and hence, reliance by the Ld.. PCIT (Central), Ludhiana on said circulars and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2010-2011 are on account of promotional items purchased by the company and dispatched to the distributers/ stockiests on schemes given by the company from time to time to enhance the sales. The company usually gives the schemes to its distributors/ stockiests/ retailers to provide the promotional items free of cost on achievement of sales targets given by the company. Please find enclosed as sample copy of one of scheme circulated during the financial year 2009-2010. Also find enclosed 5 Sales Bills (as sample Bills) giving proof of Promotional items being dispatched to distributors. Further Business promotion expenses also includes the expenses on account of purchase of catalogues, visual aids and price lists of the company to be circulated to the distributors/ stockiest/ retailers and to the marketing staff of the company. " 6.2.2 The Ld. AR further referred to the numerous details filed during the original assessment proceedings such as certified ledger copy of the business promotion expenses in the books of accounts of the assessee for assessment year 2010-2011, which described the nature and description of each and every expenditure as made under this head, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of original assessment proceedings. 6.3.0 Assessment Year 2011-12: Similarly, the Ld. AR brought to our attention that the original assessment for AY 2011-12 was also framed u/s 143(3) and that this issue was again the subject matter of examination/verification by the AO concerned and that a copy of reply dated 21.11.2013 had been placed at page 27 of Paper Book-1, wherein, the details of various expenses debited in the profit and loss account along with 'Business Promotion' expenses had been submitted and copies of bills with dates and narrations of each item had been filed at pages 28 to 46 of the Paper Book-1. 6.3.1 The Ld. AR further referred to reply dated 20.12.2013 as filed during the course of assessment proceedings and wherein in reply to certain queries at page 48, party wise details of the 'Business Promotion' expenses had been submitted at that time to the Assessing Officer as per copy placed at pages 49 to 51 along with complete addressees of the persons to whom the freebies/gifts were handed out. The Ld. AR further brought to our attention that such 'Promotional Schemes' were meant only for the Distributors/consignee sale ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally referred to pages 145 to 149 of the Paper Book-1, wherein certain 'Incentive Schemes' for the Authorized Stockists have been mentioned. The Ld. AR also drew our attention to the 'order sheet entries' for the said year, placed at pages 150 to 156 of the Paper Book-1. He specifically drew our attention to page 152 wherein the concerned Assessing Officer had called for details of the 'Business Promotion' expenses and the order sheet entries which demonstrated that detailed examination had been carried out by the Assessing Officer on the issue. The Ld. AR also referred to the original Assessment order for AY 2014-15 and submitted that no adverse view had been taken by the Assessing Officer vis-à-vis Business Promotion Expenses. 6.6 The Ld. AR, on the strength of the original assessments framed, argued that since the original assessment orders have been passed after detailed scrutiny and especially the issue of 'Business Promotion' expenses had been examined/verified and is part of the record of the Assessing Officer's file in the assessments framed u/s 153A/143(3), which are now the subject matter of revisionary proceedings u/s 263 by the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount paid to related person u/s 40A(2)(b) in Audit report and ITR Kindly submit the complete reply of the above also on 05.11.2019. As per the request of the counsels, the case is adjourn to 05 11.2019. " 6.8 The Ld. AR further referred to the chart placed at Paper Book-3, at page 1 giving a snap-shot of the 'Business Promotion' expenses booked in different assessment years and brought to the notice of the Bench that seven assessments had been framed u/s 143(3) as per chart hereunder:- Details of business promotion expenses for AY 2008-09 to 2018-19 and completion of assessment proceedings originally and in the order u/s 153A/143(3) Assessment Year Business Promotion Expenses Relevant Page of Paper book Original assessment u/s Date of Original assessment u/s 143(3) Date of assessment u/s 153A 2008-09 1741223 7 143(l)(a) N.A. 30.12.2019 2009-10 11011055 17 143(3) 07.12.2011 30.12.2019 2010-11 20423090 27 143(3) 11.02.2013 30.12.2019 2011-12 40255106 37 143(3) 27.02.2014 30.12.2019 2012-13 31322845 49 143(3) 19.03.2015 30.12.2019 2013-14 36537940 61 143(l)(a) N.A. 30.12.2019 2014-15 558757 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 9 2016-17 153A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 10 2017-18 153 A 25.02.2019 09.09.2019 23.09.2019 30.12.2019 11 2018-19 143(3) 25.02.2019 30.11.2018 23.09.2019 30.12.2019 6.10 Referring to the above chart, the Ld. AR submitted that it is proved beyond any doubt that all the search assessments proceeded on a similar pattern and on same dates, which are proved from the order sheet entries of search assessments placed at pages 1 to 79 of Paper Book-V. It was further argued by the Ld AR that since this issue had been examined threadbare in the original assessment proceedings and in the proceedings u/s 153A and coupled with the fact that no incriminating material or otherwise any other evidence had been found during the course of search that any "Freebies/Gifts" was given to the Doctors/Medical Practitioners, therefore, the findings of the Ld. PCIT (Central) with regard to setting aside of the assessments for making enquiries, relating to the nature of 'Business Promotion' expenses was misconceived. It was further argued that it is settled law that the search assessments have to be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not Medical Professionals and Promotional Incentives/Schemes are offered for 'Business expediency' only. e). Reliance was placed by the Ld. AR on various judgments, including that of the Hon'ble Apex Court and of the Jurisdictional High Court in the case of 'Leader Valves Ltd. reported in 295 ITR 273 (P&H), ITR 410 of Dalmia Dadri Cement Ltd. that if one issue has been examined in the case of same assessee, then no adverse view can be taken, if that issue has been accepted, until or unless, the facts are not similar. It was argued that issue of 'Business Promotion' expenses had been examined in different years and hence there being no change of facts, even on merits, on the principle of consistency, the said "Business Promotion" expenses were allowable. 6.12 The Ld. AR argued that, thus, it was apparent that issueof gifts and freebies have been examined thoroughly by the various AOs during the course of original assessment and, therefore, the Ld. PCIT had wrongly concluded that this issue had not been examined by the AO making the assessment orders erroneous as being prejudicial to the interest of the Revenue. 6.13 It was further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, even if the issue had been examined in the original assessment proceedings u/s 143(3) of the Act, the same would not be having any relevance here. It was further argued by the Ld. CIT DR that even some of the assessments viz. for AYs 2008-09, 2013-14 and 2017-18 had been originally framed u/s 143(1) (a) of the Act and further for two assessment years viz. 200910 and 2015-16, assessments had been framed u/s 143(3) but as per records, no inquiry or investigation had been made by the AO concerned in respect of Business Promotion Expenses and as such the Ld. PCIT had rightly cancelled the assessments. The Ld. CIT DR pointed out that even if some examination or verification of the issue had been carried out by the AO in one or few of the assessment years, the same could not be applied for all the assessment years as each year is a separate year and assessment has to be completed on the facts and records available for that particular assessment year. 7.1 It was further argued by the Ld. CIT DR that it is not necessary that there should be any incriminating material for the purpose of making any addition in search assessments because section 153A of the Act is a complete code in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies furnished by the assessee in response to the queries that the AO had reached the conclusion that no freebies or gifts were given to any Medical Practitioners or doctors thereby enabling him to form an opinion that Explanation to Section 37(1) of the Act was not attracted in the assessee's case and that the amount of expenditure claimed under the head 'Business Promotion Expenses' was an allowable expenditure. It was submitted that the AO had reached this conclusion after due application of mind although he might not have elaborated the same in the assessment orders but it would not mean that the AO had failed to conduct the requisite enquires on the issue. 9.0 We have gone through the rival submissions and have also perused the records as well as the impugned orders. It appears that the Ld. PCIT (Central), Ludhiana initiated the proceedings u/s 263 on the basis of the judgment of the Hon'ble Apex Court' in the case of 'Apex Laboratories Pvt. Ltd. vs. DCIT in Civil Appeal No. 1554 of 2022 vide judgment dated 22.02.2022 and the contention of the Ld. AR has been that the assessee has no link or connection with the Medical Practitioners/Doctors, since it is not giving any 'Freeb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so includes the expenses on account of purchase of catalogues, visual aids and price lists of the company to be circulated to the distributors/ stockiest/ retailers and to the marketing staff of the company." 9.3 Further, there is a reply dated 01.12.2016 furnished by the assessee during the course of original assessment proceedings for A.Y. 2014-15, wherein, the same fact was reiterated at S.No.14, page 118 of Paper Book-1, as is evidenced by the following paragraph of the said reply:- 14. "The company purchase and send the gift items according the stockiest scheme being floated by the company during the relevant period. The gifts are purchased by the company and booked in Business promotion account and the same are sent to stockiest of the company according to the targets achieved through distribution network. The company does not give any gift or freebies to the doctors. 9.4 Similar are the queries and replies in other assessment years as well. In so far as the search assessments under section 153A are concerned and which have been the subject matter u/s 263 of the Act, we find ourselves in agreement with the contention of the Ld. AR that initiation of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orne out from the reply of the Assessing Officer in the 'Annotated Report', as enclosed at pages 193 to 197 of Paper Book-1 and in this report dated 18.03.2021, the Assessing Officer has communicated as under:- "However, from the perusal of the record it has been found that the assessee company deals in marketing and trading of generic pharmaceutical, healthcare and cosmetic products through C&F agents for distribution and sales of goods and the company has not made any expenses on any gifts to medical practitioners or their professional associations. The items mentioned in the audit objections are given as gifts to the dealers for bulk purchase and sales increments. No adverse facts as stated in the audit objections were found either during the course of search or during the course of assessment proceedings. Thus, the issue raised by the revenue audit party have been examined during the course of assessment proceedings u/s 153A rws. 143(3) of the IT. Act, 1961 and the objection was found to be without any basis and is not acceptable. Further, it is pertinent to mention here that the revenue audit party attended the office during Feb 2021 and audited the assessment completed u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars the Doctors from accepting such gifts and we also note that this judgment relates to the Gifts received by 'Medical Practitioners/Doctors only whereas in the present case, it is a fact on record that the AO, after making in-depth enquiries/examinations/verifications of 'Business Promotion' expenses had found that no 'Freebies/Gifts' were given to Doctors/ Medical Practitioner. Above all, the concerned Assessing Officer, who framed the search assessments has categorically admitted in 'Annotated Report' that no such gifts have been given to Doctors/Medical Practitioners by the assessee and, therefore, in our considered view, the Ld. PCIT (Central), Ludhiana was not justified in cancelling the assessments framed by the Assessing Officer vide orders dated 30.12.2019 on the issue of freebies/gifts to the Doctors /Medical Practitioners and to that extent the order of Ld. PCIT (Central), Ludhiana is set aside. 9.9 While giving this finding, we have also gone through the finding of the Ld. PCIT from Para 5.4.1 to Para 5.9.2 of the impugned order as well as the rebuttal made by the Ld. AR in 'tabular form', which for the sake of ready reference, is being reproduced herein under:- CONT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular, in which, again, it has been mentioned about Freebies to Medical Practitioners and their professional associates and the violation of the provisions of Indian Medical Council (2002), have been referred to. Our stockiest/Distributors are not 'medical professionals' and they are not under the guidelines of Medical Council of India. Para 5.8, Page 16 In this paragraph, it has been mentioned by the Ld. PCIT that section 37(1) would cover acceptance of Freebies by Medical Practitioners, which is prohibited by law and then, the reference has been made to the Judgment of 'Apex Court'. The Ld. PCIT (Central), Ludhiana has grossly erred in mentioning these facts, since these incentives are being given only to Stockiest/Distributors, under a scheme to make more sales and a bare look at the judgment of 'Apex Court', which has been placed at pages 129 to 159 of the 'Judgment set' and at so many paragraphs, of the case, it has been clarified, especially at page 153 of 'judgment set' in para 33 that pharmaceutical company gifting the Freebies to Doctors etc. is clearly prohibited by law and not allowed to claim deduction u/s 37(1). In our case, the person concerned, who are receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) as per Chart at page no. 1 of PB-3,and therefore, once the issue has been examined in one particular year and here number of times in different assessment proceedings, the issue have been examined, thus, on the basis of consistency and without there being any other material on record, the same view was liable to be taken as per the following Judgments:- a. CIT Vs/ Dalmia Dadri Cement Ltd. (1970) 77 ITR 410 (P&H) b. Berger Paints India Ltd. Vs CIT (2004) 266 ITR 99 (SC) c. DCIT V/s United Vanaspati Ltd. (2005) 275 ITR 124 (AT) (TM) d. Radha Soami Satsang Vs CIT(1992) 193 ITR 321 (SC) e.CIT V/s Arthur Andersen & Co.(2009) 318 ITR 229 (Bom) f.Commissioner of Income Tax V/s Leader Valves Ltd.(2007) 295 ITR 273 (P&H) g. PRINCIPAL CIT V/S GRASIM INDUSTRIES LTD. 424 ITR 236 (BOM) h.CIT (EXEMPTIONS) V/S INDIA HABITAT CENTRE 425 ITR 325 (DEL) i.DCIT Vs Marigold Premises Pvt. Ltd. as reported 83 ITR (Trib.) 32 (Pune) j.CHITTHARANJANA DASANNACHARYA VS. CIT 429 ITR 570 (KARN) DATED 23.10.2020 k. TIRUPATI PROCON PVT. LTD. VS. ITO 85 ITR (TRIB) 76 (DEL) DATED 14.01.2021 9.10 We find no flaw in the above rebuttal by the assessee and we are of the view that this rebuttal, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises." 9.13 Similarly, the Hon'ble Apex Court in the case of PCIT vs. Shreeji Prints (P) Ltd. reported in 130 taxmann.com 294 has held as under: "Section 69, read with section263, of the Income-tax Act, 1961 - Unexplained investments (Unsecured loans) - Assessment year 2013-14 - Assessee-company loans from two different companies Commissioner noting that said investment in assessee's name in balance sheet of respective companies exercised his revisionary powers and passed an order without giving an opportunity to assessee of being heard, invoking Explanation2 to section263 - High court by impugned order held that since Assessing Officer has made inquires in details and accepted genuineness of loans received by assessee, such view of Assessing Officer was a plausible view and same cannot to be considered erroneous or prejudicial to interest of revenue impugned order was to be dismissed - Held, yes [Para 2] [In favour of assessee]" 9.14 Similarly, the Hon'ble Apex Court in the case of Commissioner of Income-tax vs. Nirav Modi reported in [2017] 77 taxmann.com 15 (SC), has held as under: "Section 68 read with section 263, of the Income-tax Act, 1961 - Cash credit (Gi ..... 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