Money spent on foreign trips of doctors cannot be claimed as expense: IT Tribunal

In what can be indeed termed as a landmark move, the Mumbai bench of the Income Tax Appellate tribunal, has taken head-on action against pharma companies, providing freebies and trips to medical practitioners to lure them to prescribe a specific medicines/formulations. As per the recent action of the tribunal, a pharma company has been disallowed to claim expenses made towards foreign trips of doctors and their spouses in its statements.

The case is that of Liva healthcare,a pharma company specializing in dermatology formulations which during the financial year 2008-09, incurred an expenditure of  Rs 76.55 lakh  towards overseas trips for doctors and their spouses. However, an I-T officer at the assessment stage disallowed the company to claim this as an expense, a decision, that has now been upheld by the Appellate tribunal, reports TOI