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5. The Ground No.2 relates to disallowance of expenditure incurred for doctors towards business promotion and accommodation of Rs.9,81,46,332. The Ground No. 4 in Departmental Appeal also relates to disallowance of business/ conference fee and sponsorship expenses under the gift and freebies to doctors of Rs.2,26,07,758/-. As both the grounds of appeal are interlinked with each other, they are adjudicated together.

5.1. The Ld AO has observed that the assessee has incurred various expenditure being accommodation, Business Promotion Expenses, Conference Fees aggregating to Rs.9,81,46,332/= and freebies and gifts paid to Doctors of Rs.2,26,07,758/-. The Ld. AO has referred to CBDT Circular No. 5/2012 in F.No. 225/142/2012 ITA II, dated 1st August, 2012 wherein it is stated that expenditure incurred for providing freebies of the above nature by pharmaceutical and allied healthcare sector is inadmissible expenditure u/s. 37(1) of the Act. The above addition made by Ld. AO was partially upheld by Ld CIT(A).

5.3. Per contra Ld CIT DR appearing for the Revenue supported the order passed by the lower authorities and decision dated 06- 10-2023 in assessee's own case by Co-ordinate Bench decision in ITA Nos.1464 & 1465/Ahd/2018 & Others relating to the Asst. Years 2013-14 & 2014-15. The Ld. CIT DR has relied upon the observation of the lower authorities and contended that considering the decision Hon'ble Supreme Court in case of Apex Laboratories Limited 135 taxmann.com 286, freebies provided to Doctors cannot be allowed as revenue expenditure u/s. 37(1) of the Act.

6. We have heard the rival contentions, perused the materials available on record and given our thoughtful consideration. The assessee has claimed accommodation, business promotion and conference expenses incurred, which are mainly gifts and freebies to doctors. While passing the assessment order, the Ld. AO has verified the ledger account of such expenditure and found that Sun Pharma Labs. Ltd. vs. DCIT such expenditure are freebies that include sponsorship for attending conferences, medical equipment, travel facilities and hospitality to be distributed to such medical practitioners, which is prohibited by Medical Council of India [MCI]. It is found that Ld. CIT(A) has confirmed the expenditure in nature of accommodation and business promotion but deleted Conference and Sponsorship expenses incurred for Doctors on the ground that same are incurred for sharing the knowledge in the medical field, which is not hit by Circular No.5/2012 and amended MCI guidelines. The Ld. CIT DR on the other hand placed reliance on the decision of the Supreme Court in the case of Apex Laboratories cited supra.

4.1 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs.2,26,07,758/- in respect of conference fees and sponsorship under the head gift and freebies to doctors without appreciating the facts and reasons mentioned by the AO in the assessment order.

Sun Pharma Labs. Ltd. vs. DCIT 4.2 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance of Rs. 2,26,07,758/- in respect of conference fees and sponsorship under the head gift and freebies to doctors without appreciating the real nature of these expenses which were actually freebies and gifts to medical practitioners.