The Tax Publishers2021 TaxPub(DT) 0401 (Mum-Trib)

INCOME TAX ACT, 1961

Section 263

Professional fees paid to doctors was regular consultancy fees and not any freebees and, therefore, same was rightly allowed as deductible under section 37(1) and, therefore, on this count assessment order could not be treated as erroneous insofar as prejudicial to the interests of revenue.

Revision under section 263 - Erroneous and prejudicial order - Professional fees paid to doctors -

Pr.CIT invoked jurisdiction under section 263 on the ground that AO failed to carry out enquiries as regards nature of professional fees paid to doctors and further allowability of expenses as deduction under section 37(1). Assessee contended that payments were made to doctors on regular consultancy fees and not relating to freebees. Held: It was duty of Pr. CIT to establish that concerned payments were in fact freebees and not regular consultation fees, without actually finding that these were freebees and payment were in violation of conditions specified in Circular No. 5 of 2012, he proceeded to annual assessment order. Further, payment made to doctors by pharmaceutical companies and allied healthcare industries not in violating of Circualr No. 5 of 2012. It is applicbale only to the practising doctors. As such Pr.CIT had not clearly brought on record that payments were actually in contravention of circular and provision of section 37(1) and, therefore, assessment order could not be treated as erroneous insofar as prejudicial to the interests of revenue.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14



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