The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has disallowed expenditure holding that the distribution of samples of infant milk substitute, feeding bottles and infant foods were legally prohibited activities.
the assessee company Mead Johnson Nutrition (India Pvt. Ltd) was engaged in the business of trading of ‘infants & children nutrition food’. For the year under consideration, the assessee filed a return of income. The return of income filed by the assessee was selected for scrutiny and statutory notices under the Act were issued.
In the scrutiny assessment completed under Section 143(3) of the Act, the Assessing Officer made disallowance of expenses on account of free samples and disallowance of conference & seminar expenses.
Bhaumik Goda appeared on behalf of the assessee and Mahita Nair appeared on behalf of the revenue submitted that the assessee had failed in providing the list of name and address of recipients of free samples.
The Mumbai Bench of O M Prakash Kant (Accountant Member) and Sandeep Singh Karhail (Judicial Member) upheld the order of the Commissioner of Income Tax Appeal (CIT(A)) and allowed the appeal.
On perusal of section 4 of the Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992, the Bench held that distribution of samples of Infant Milk Substitutes, Feeding Bottles and Infant Foods had been prohibited under the Act.
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