source on the payments made by the assessee hospital to the
doctors and pathology laboratory in relation to inpatients.
4. The brief facts ... case are that the assessee hospital provides
consultation services of specialist doctors as well as pathology laboratory to its
in and out patients. During
practice to distribute sales promotion articles to
stockists, distributors, dealers, customers and doctors in order to promote
volume of sales. The CIT(A) taking support ... view that the same were distributed predominantly to
doctors and medical professionals in addition to stockists, chemists,
distributors and customers. The CIT(A) was further
being freebies given by the
assessee to doctors, ignoring the fact that such payments are
specifically prohibited w.e.f. 10.12.2009 by the Medical
Council ... being freebies given by the
assessee to doctors observing that the prohibition by IMA is on
medical practitioners and not applicable to Pharma companies
without
were
incurred towards travel and hospitality expenses of various Doctors /
heath care professionals for attending various conferences organized
by the assessee company which was incidental ... complete list of expenses together with the list of
recipients i.e Doctors and medical professionals thereon and observed
that these expenses were incurred
pertains to disallowance of payment made to
doctors.During the assessment proceedings,the AO found that the assessee had debited Rs.13.26
crores ... prohibited by MCI regulation,that the
expenses were incurred by benefit of doctors and not associations, that the associations were not
at liberty to spend
2012 and Gazette notification issued regarding code of
conduct for doctors and professional association of doctors in their relationship with
pharmaceutical allied health sector industries ... Bayer.
expenses in the form of gift and freebies distribution to the doctors/medical practitioners, that
same were not medicine samples which could
expenditure so incurred are not
in the nature of freebies to the doctors. In these circumstances, the
assessment order dated 08.03.2015 was held ... applicable to the pharma company but is applicable only to the
professional doctors in practice and accordingly when circular itself is not
applicable
Sales Promotion Expenses of Rs.36,92,20,070/- incurred on doctors prescribing
Appellant Company's Products:
1. On the facts ... initially disallowed the sales promotion
expenses pertaining to the freebies given to doctors in light of the CBDT
Circular No. 5/2012 read
Shankar Theatres v. CIT [1984] 146 ITR 547
2. CIT v. Doctor & Co. [1989] 80 ITR 627 (Bom. ).
Shri Vyas pointed out that ... Jurisdictional High Court viz,, Shankar Theatres ' case ( supra) and Doctor & Co. 's case (supra) were applicable.
22. We have considered the rival
that business, they distribute samples of
their products free of charge to doctors through their representatives who record in certain forms information regarding their ... doctor and his experience in that regard.
4. The Income-tax Officer made a partial disallowance of the expenditure under Section
