The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has upheld the addition as the assessee had failed to produce confirmation letter and promotion expenses incurred towards the medicine agency.
An assessment order under Section 143(3) of the Income Tax Act was passed on 28-03-2014 in which the AO had disallowed sales promotion expenses and assessed the income of the assessee, Lincoln Pharmaceuticals Ltd. In appeal, the Commissioner of Income Tax Appeals (CIT(Appeals)) dismissed the appeal of the assessee on ex-party basis as the assessee had not attended the appellate proceedings from time to time and no evidence was submitted during appellate proceedings.
The assessee preferred appeal before ITAT, Ahmedabad, who set aside the matter to the file of AO for fresh examination after giving an opportunity to the assessee to present necessary evidence in support of its claim.
In the second round of proceedings, the AO issued notices to five parties in respect of whom sales promotion expenses had been incurred and received replies from 3 parties.Accordingly, the AO deleted in addition with respect to the 3 parties from whom the replies / confirmation had been received by the assessing officer.
However, with respect to two parties, the AO observed that one party “Medicine Agencies, Lucknow” had not given any reply, whereas the other party “Adikanta Associates, Orissa India”, in their reply had not given any quantitative details regarding gift items received. Accordingly, the Assessing Officer confirmed the additions with respect to the aforesaid two parties. In appeal, CIT(Appeals) gave further relief to the assessee with respect to one party “Adikanta Associates, Orissa” from whom reply was received by Lincoln Pharmaceuticals by assessing officer
The Assessee in his written submissions had stated that the aforesaid sales promotion expenses were not given to Doctors/Medical Professionals and hence Central Board of Direct Tax (CBDT) Circular number 5 of 2012 was not applicable to assessee’s set of fact.
Ashok Kumar Suthar, appeared on behalf of the revenue.
The two-member Bench of Annapurna Gupta, (Accountant Member) and Siddhartha Nautiyal, (Judicial Member) dismissed the appeal filed the assessee holding that the assessee in the instant facts, had not been able to produce any supporting evidence with respect to promotion expenses incurred towards “Medicine Agency, and no reply / confirmation from the aforesaid party had been received.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
