COMMISSIONER OF INCOME TAX Vs. TORRENT PHARMACEUTICALS LTD

JUDGEMENT

(1.) By way of this appeal, the appellant ­ Department has challenged the order dated 04/10/2005 passed by the ITAT in ITA No.1177/Ahd/1999 for the assessment year 199596.

(2.) The short facts of the case are that AO noticed during the course of assessment proceedings that the assessee claimed Special advertisement expenditure amounting to Rs.39,49,930/, however the AO allowed 1/5th of the expenditure and made dis allowance of Rs.31,59,944/. In the assessment order, an amount of Rs.13,62,000/ was disallowed in respect of travelling and medical expenses of the Chairman. That in the assessment order, an amount of Rs.5,44,23,397/ was disallowed in respect of interest paid on nonconvertible debenture shares of public issue. That in the assessment order, a lump sum dis allowance of Rs.4,91,93,000/ was made out of expenses for selling publicity and medical literature. The matter was carried before the CIT (Appeals) and who had deleted the addition on account Special advertisement expenditure; travelling and medical expenses of the chairman, interest paid on non convertible debenture portion of public issue debenture (capitalized); selling publicity and medical literature. Thereafter, the matter was carried before the ITAT and it had upheld the order of the CIT (A) which has given rise to this appeal.

(3.) While admitting this appeal, several questions were posed for consideration, however the appeal came to be admitted on the following question of law: