Assessee-company was running hospital and was providing treatment to its patients. It claimed expenditure towards referral fees paid to doctors for referring their patients to assessee’s hospital . AO disallowed said expenditure alleging that it was clear violation of prohibition mandated by Indian Medical Council in terms of Explanation 1 to S. 37(1) of the Act .\u00a0\u00a0 CIT (A) affirmed the disallowances made by the AO . On appeal The Appellate Tribunal held that\u00a0 regulation issued by Medical Council of India was applicable to doctors\/medical practitioners and not for pharmaceutical companies or allied health sector industries like that of assessee . Accordingly\u00a0 the expenditure on payment of referral fees to doctors could not be said to be in violation to Regulations of Indian Medical Council\u00a0 . As the expenditure\u00a0 was incurred wholly and exclusively for purpose of carrying on its business,\u00a0 the same was allowable as deduction. (AY.\u00a0 2009-10 ,\u00a0 2013-14\u00a0 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S.37(1): Business expenditure – Referral fees – Hospital, paid referral fee to doctors for referring their patients to assessee’s hospital- Regulations of Indian Medical Council was not applicable to pharmaceutical company or allied health sector industries- Entitled to deduction <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-12796","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3ko","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=12796"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12796\/revisions"}],"predecessor-version":[{"id":19668,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12796\/revisions\/19668"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=12796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=12796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=12796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}