pharmaceutical and allied health sector industries for
distribution of incentives (i.e., “freebies”) to medical practitioners are ineligible
Signature Not Verified
Digitally signed ... explain why the expenditure of ₹
4,72,91,159/- incurred towards gifting freebies such as hospitality, conference
fees, gold coins, LCD TVs, fridges, laptops
accepting gifts, travel
facilities, hospitalities, cash or monetary grants (known as "freebies") from
pharmaceutical and allied health care sector industry ... 2012-ITA.II, dated
01.08.2012 had clarified that such "freebies" shall be inadmissible under
Sec. 37(1) of the Act being an expense
recipients in this regard.The AO observed that the items were freebies which were prohibited
by the Govt. of India.Vide his order sheet noting ... 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
grossly erred in disallowing expenses allegedly incurred towards providing
gifts and freebies to the doctors / medical practitioners by invoking the
provisions of Indian Medical Regulations ... verification found that selling and
distribution expenses includes gift and freebies to the doctor for an amount
aggregating to Rs. 6,64,27,499/- detailed
that it had initially disallowed the sales promotion
expenses pertaining to the freebies given to doctors in light of the CBDT
Circular No. 5/2012 ... expenses claimed by the pharmaceutical
companies on account of distribution of freebies being in violation of the
provisions of Indian Medical Council (Professional conduct, etiquette
considered the
issue of allowability of deduction for gifting of freebies by the
pharmaceutical company to medical practitioners under
Explanation 1 to section ... restricted to those examples. It is but
logical that when acceptance of freebies is punishable by the MCI (the
range of penalties and sanction extending
deduction u/s 37(1) for expenses incurred on providing freebies to
doctors, had disallowed the assessee‟s claim for expenses insofar the
same related ... amended IMC Regulations, a doctor shall not receive
any freebies in the form of gifts, travel facility, hospitality, and cash or
monetary grants from
that the
expenses incurred by the assessee towards giving various freebies to
doctors for promotion of its business was inadmissible under
been initiated) is expenditure incurred on distribution of
gifts / freebies to doctors and Medical Practitioners in the form of
televisions, laptops, electronic goods, mobiles, sponsorship ... expenditure and
without verification of the beneficiaries of the gifts and the freebies
distributed and, therefore, apparently the AO had passed the assessment
order without
account of expenses classified as freebies confirmed by the ld.CIT(A)
may kindly be deleted.
ITA No.2458/Ahd/2017
2
2. The disallowance ... expenditure claimed as 'Non-freebies'
u/s.37(1) of the Act of Rs.1,00,67842/- under various heads
