Advertisement Expenses paid to Prasar Bharati by Doctor Eligible for Deduction though it violates Indian Medical Council’s Norms: ITAT [Read Order]

Doctor - ITAT

The Kolkata bench of the Income Tax Appellate Tribunal in the case of Amit Ghose versus DCIT wherein bench held that the advertisement expenses incurred by a Doctor are eligible for income tax deduction under section 37 of the Income Tax Act, 1961 though the same is in violation of the norms of the Indian Medical Council Regulation Act.

In present case, the Assessee running a clinical laboratory called “The Oxford Clinic” filed its return of income and AO observed that Assessee debited a sum under the head advertisement and publicity. The assessee had made payment of telecast fee to Prasar Bharati for ‘Hello Doctor Babu’ for Rs. 20,000/-. The assessee has also paid of Rs. 54,000/- towards concept, design and space for display article in ‘Aajkal Sastha’ which is a health magazine wherein the general discussion in health issues were recorded. In other words, the assessee has participated in the dissemination of knowledge in the health magazine for the general welfare of the public at large. However, the AO denied the claim of expenditure and held that the same cannot be allowed under section 37(1) of the Act.

The Assessee maintained that he had conducted several medical literatures which were published in newspapers and are really meant for general awareness the payments for the same were made by the assessee. Assessee further contended that he had incurred expenses to make aware of the urological diseases including its prevention and cure, which cannot be merely treated as advertisement or publicity expenses.

On the counterpart, revenue argued that such expenditure is against the provision of Indian Medical Council Regulation Act, 2002 and thereby expenditure incurred for committing offence or an Act which is prohibited by law.

The bench comprising Aby. T. Varkey, judicial member & M.Balaganesh, accountant member accepted the contention of the assessee that Prasar Bharati, being a government organization, would not allow any programme on national television in order to promote the business of just a single doctor like assessee. The bench further held that Prasar Bharati being a Government Organization would not receive any fee for any service connected with the offence under any Act or any law. “In other words, they would not engage in any activity and receive consideration for the Act which is prohibited by law. We are also inclined to accept the argument of the ld. AR that the assessee had incurred expenses to explain by publicizing a general literature with image and diagram of the human body to make aware of the urological diseases including its prevention and cure, which cannot be merely treated as advertisement or publicity expenses,” the bench said.

The bench further added that “Even assuming that the act of the assessee would be in violation of code of ethics as formulated by the medical council of India, the same, in our considered opinion, would not get covered under the ambit of Explanation to section 37(1) of the Act, inasmuch as the Medical Council of India is an independent body and not a department under the Ministry of Health. The Indian Medical Council is holding regulatory powers on its members. The guidelines issued by them are for the purpose of compliance of the professional ethics. Such guidelines cannot be equated to any legal provision having statutory force/recognition. In violation of the same, no civil suit is maintainable on the person who has violated. Hence, we are of the considered view that the same would not fall under the ambit of Explanation 1 to section 37(1) of the Act.”

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