COMMISSIONER OF INCOME TAX Vs. WOCKHARDT PVT LIMITED

JUDGEMENT

(1.) ON 30th March, 2001, the appeal of the Department was allowed with reasons to be recorded separately subsequently. We, accordingly, now, hereby give reasons for allowing the appeal.

(2.) THE following question of law arises for determination under S.260A of the IT Act.

(3.) IN the case of Eskayef vS.CIT (2000) 162 CTR (SC) 89 : (2000) 245 ITR 116 (SC), it has been held by the Supreme Court that even in the case of ethical/prescription drugs the target for publicity, advertisement or sale promotion could only be the doctor who would prescribe the medicine and, therefore, such distribution amounted to publicity and sale promotion and, therefore, the case fell within the scope of S.37(3A) of the IT Act. The Supreme Court overruled the judgment of the Andhra Pradesh High Court (1997) 140 CTR (AP) 577 : (1996) 222 ITR 11 (AP) : TC S17.1927 (supra). However, learned counsel for the assessee submitted that, in the present matter, the case should be remitted back to the Tribunal inasmuch as no opportunity was given to the assessee in the present case to show that free samples were given only to find out the reaction of the doctors about the efficacy of the drug. That no opportunity was given to the assessee in the present case to prove that the supply of free samples was confined to the initial stage of production of a new drug. In this connection, the learned counsel placed reliance on para 2 of the aforestated judgment of the Supreme Court at p 119. We do not find any merit in this contention. Firstly, in the present case, we are concerned with the asst. year. 1984 85. Secondly, nothing prevented the assessee from raising the aforestated contention before the authorities below. In fact, in the present matter, the Tribunal has observed that no details have been given by the assessee as to whether the expenditure incurred was on distribution of old drugs or whether it was given on distribution of new drugS.Hence, the judgment of the Supreme Court in Eskayef vS.CIT (supra) squarely applieS.