The Income Tax Appellate Tribunal (ITAT), Bangalore Bench deleted the disallowance of business promotion expenses.
The appellant, M/s. Vascular Concepts Limited challenged the notice issued under section 153A of the Income Tax Act wherein the business promotion expenses was disallowed.
However, the Tribunal in its earlier order for assessment years 2012-2013 and 2013-2014 held that the expenses incurred on doctors is to be allowed as revenue expenditure.
The assessee submitted that the Assessing Officer had disallowed the entire business promotion expenses. It was stated that in the assessment year 2007-2008 out of the total business promotion expenses of Rs.3,41,00,217 only Rs.1,21,06,967 is incurred on Doctors’ expenses, which only ought to have been considered for disallowance, if at all under section 37 of the Income Tax Act.
It was submitted from the evidence produced, it is clear that the Doctors related expenses are towards expenditure incurred for the Doctors attending the conference as a faculty (Euro PCR, Sing Live, TCT).
It was further submitted that the complete list of Doctors and members who had attended the conference along with the confirmation letters from them registering the attendance of the conference was submitted to the Assessing Officer.
The coram consisting of George George K and B.R.Baskaran ruled that expenditure relating to doctors incurred by the assessee prior to August 1, 2012, need to be allowed as revenue expenditure.
“Since we are concerned with A.Y’s 2007-2008 to 2011-2012, the CBDT Circular No.5/2012 dated 01.08.2012 does not have an effect on these cases. Accordingly, we direct the A.O. to delete the disallowance of business promotion expenses in A.Y. 2007-2008 to 2011- 2012” the ITAT while allowing the appeal said.
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