M/s. Abbvie Therapeutics India Pvt. Ltd. vs. DCIT

Parties Involved

Facts Summary

Assessee is a private limited company engaged in the business of trading of ophthalmic products. For the Assessment Year 2018-19, the return of income was filed declaring total income of Rs.149,13,02,950/-. The assessment was selected for scrutiny and notice under section 143(2) of the Act, was issued on 22.09.2019. During the course of assessment proceedings, assessee was directed to justify the claim of deduction in respect of Local Promotion Budget Settlement (LPB SETT) expenditure to the tune of Rs.6,44,38,642/- under section 37 of the Act. The notice issued from the Office of the AO was on 15.03.2021 directing the assessee to provide response by 18.03.2021. Assessee filed an adjournment application on 17.03.2021 seeking two weeks’ time to file its response to the above mentioned show cause notice. The AO, without taking cognizant of the adjournment letter filed by the assessee, passed the Assessment Order under section 143(3) of the Act, on 23.03.2021, wherein he disallowed LPB SETT expenses of Rs.6,44,38,642/- based on CBDT’s Circular No.5/2012 both under the normal provisions of the Act and for the purpose of computing book profits under section 115JB of the Act. Aggrieved by the disallowance of LPB SETT expenses, assessee filed appeal before the First Appellate Authority (FAA). Before the FAA, assessee had filed additional evidence in support of its claim of deduction of LPB SETT expenses under section 37 of the Act. It was contended by the assessee before the FAA tha…

Legal Issues

• 1. Disallowance of `LPB SETT' Expenses under section 37 of the Act

Judgment Outcome

Decided in favour of Assessee.

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