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expenses of Rs.7,27,99,029/- are pertaining to the equipment provided to various medical practitioners as gifts. Claim of indirect business gain as a result of gifts provided to the medical practitioners is irrelevant for allowability of these expenses. The appellant has also argued that the amendment to Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulation 2002 on 10.12.2009 and CBDT Circular No. 5/2012 dated 01.08.2012 are not applicable in the case of appellant since they are applicable to the Doctors/ Medical Practitioners accepting freebies. This argument of Ld. Authorized Representative is also not acceptable. Undisputedly, Medical Council of India has amended Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations 2002 with effect from 10.12.2009 prohibiting from accepting of gifts, travel facility or hospitality, from any pharmaceutical company or the health care industry by the doctors/medical professionals. Thus regulation is issued by the statutory body created under the Act of Parliament i.e. Medical Council Act, 1956. CBDT has also issued a Circular No. 5 of 2012 in this regard stating that expenditure on freebies given to medical professionals and their professional associations in violation of the regulation issued by the Medical Council of India which is a regulatory body constituted under Medical Council Act, 1956, will not be allowed as expenditure in view of the Explanation below section 37(1). The validity of this circular is also been upheld by the Hon'ble High Court of Himachal Pradesh vide order dated 26.12.2012 in CWP No. 10793 of 2012. Since Medical Council of India has prohibited expenditure on freebies given to the medical professional with effect from 10.12.2009, in my considered view, the Circular No. 5 of CBDT dated 01.08.2012 only reasserts the legal position and hence the expenditure on freebies will not be allowable u/s. 37(1) being an expenditure prohibited by law. Accordingly, I hold that expenditure on gifts to the extent of Rs.7,27,99,029/- shall not be deemed to have been incurred for the purposes of business or profession and hence the disallowance to this extent is confirmed.

ITA No. 1462, 1463, 1519 & 1520/Ahd/2018 [Sun Pharma Laboratories Ltd.] A.Y. 2011-12 & 2013-14 - 20 -

27.2.1. In view of the above, I hold that reimbursement of the | accommodation expenses has directly benefited the medical practitioner and j doctors and hence the same is in the nature of gifts/freebies. Similarly j various equipments gifted to the doctors debited under the head business ' promotion expenses also fall under the category of freebies. Accordingly, I further hold that accommodation expenses as well as business promotion ; expenses are hit by the Circular No. 5/2012 and amended guidelines of MCI. \ Accordingly, the action of Assessing Officer in this regard is upheld. However, conference fees and sponsorship expenses since were incurred for l sharing the knowledge in the medical field which may help in improving the product and Research and Development activity of appellant, in my considered view, it is not hit by the Circular No. 5/2012 and amended MCI Guidelines. Further they appear to be in the nature of remuneration for J services rendered by the Medical Professionals in the conference and seminars.

"17. On the facts and circumstances of the case and in law, the Ld. C.I.T.(A) erred in deleting the disallowance 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, and without appreciating the real nature of these expenses which were actually freebies and gifts to medical practitioners."

16. On the facts and circumstances of the case and in law, the CIT(A) erred in deleting the addition towards foreign exchange gain without appreciating the facts and reasons mentioned by the AO in the assessment order.

17. On the facts and circumstances of the case and in law, the Ld. C.I.T. (A) erred in deleting the disallowance 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, and without appreciating the real nature of these expenses which were actually freebies and gifts to medical practitioners.