The Circular issued by the CBDT enlarging the scope of disallowance to the pharmaceutical companies was without any enabling notification or Circular of the Medical Council of India. Therefore a pharmaceutical company is outside the scope of the circular by the Medical Council of India or the CBDT, therefore expenditure on advertisement and sale promotion is allowable as business expenditure . ( AY. 2010-11).
Emcure Pharmaceuticals Ltd. v. Dy.CIT (2018) 62 ITR 744 (Pune)(Trib.)
S.37(1) : Business expenditure — Freebies to Doctors – Advertisement and sales promotion expenses incurred by the Pharmaceutical company cannot be disallowed , on the basis circulars by Medical Council of India.