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आयकर अपीलीय अिधकरण, अिधकरण मुंबई "सी"

सी" खंडपीठ मे Income-tax Appellate Tribunal -"C"Bench Mumbai सव ी राजे ,लेखा सद य एवं अमरजीत सह, याियक सद य Before S/Sh.Rajendra,Accountant Member and Amarjit Singh,Judicial Member िनधा रण वष /Assessment Year: 2010-11 आयकर अपील सं./I.T.A./2880/Mum/2016,िनधा M/s. Bayer Pharmaceuticals Private DCIT - Range-4(1) Limited,Bayer House, Central Avenue, Aayakar Bhavan, M.K. Road Vs. Hiranandani Estate, Thane-400 607 Mumbai-400 020.

2.1.Aggrieved by the order of the AO the assessee preferred an appeal before the First Appellate Authority (FAA) and made detailed submissions and relied on certain case laws.After considering available material,he held that the assessee had incurred certain 2880/Mum/16.Bayer.

expenses in the form of gift and freebies distribution to the doctors/medical practitioners, that same were not medicine samples which could add to the knowledge of doctors and professionals towards discharging their duty and responsibility to the patients by enhanced knowledge and information, that the assessee had not disputed the finding of the AO that expenses were not in the nature of freebies.He referred to the provisions of section 37(2) wherein certain caps/limits were fixed with regard to nature of entertainment expenses incurred by the assessee in the earlier AY.s and stated that the expenses were in the nature of entertainment expenditure .He further held that Act did not allow freebies and gifts u/s. 37(1) of the Act, that Medical Association of India vide its notification dated 10/12/2009 had prohibited such incentives/gifts/freebies to be given by the corporate houses/ manufacturing concerns to the medical practitioners. He also referred to Explanation - 1 to section 37(1) of the Act and stated that Explanation was inserted by Finance Act 2015, that same was not prospective in nature. Finally he upheld the disallowance made by the AO.

2880/Mum/16.Bayer.

2.3.The Departmental Representative (DR) supported the order of Departmental Authorities and relied upon the case of LIVA Healthcare Ltd.(161ITD63).In his rejoinder,the AR stated that the Tribunal had considered the case of Liva Healthcared Ltd.,while deciding the appeal in the case of Solvay Pharma India Ltd.

2.4.We have heard the rival submissions and perused the material before us.We find that the assessee had incurred expenditure of more than Rs.1 crore towards advertisement and publicity,that the AO had observed that it had gifted freebies to the medical practitioners, that the departmental authorities were of the view that expenditure incurred by the assessee in violation of MCI Guidelines was not allowable.

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8. It is clearly admitted by the Respondent that it has no jurisdiction to pass any order against the Petitioner hospital under the 2002 Regulations. In fact, it is stated that it has not passed any order against the Petitioner hospital. Thus, I need not go into the question whether the adequate infrastructure facilities for appropriate post-operative care were infact in existence or not in the Petitioner hospital and whether the principles of natural justice had been followed or not while passing the impugned order. Suffice it to say that the observations dated 27.10.2012 made by the Ethics Committee do reflect upon the infrastructure facilities 2880/Mum/16.Bayer.