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Sun Pharmaceutical Industries Ltd. Versus Dy. Commissioner of Income Tax, Central Circle 1, Baroda, Asst. Commissioner of Income Tax Central Circle- 1, Baroda and vice-versa

2016 (2) TMI 924 - ITAT AHMEDABAD

Excusion of Exchange Rate Fluctuation from the total turnover for the purpose of the deduction u/s. 80HHC. - Transfer pricing adjustment - Held that:- The assessee has paid commission to its AE and we find that the basis for the payment of commission has also been given to justify it to be at arm’s length. The TPO/A.O has nowhere denied that the weighted average rate of commission paid by the assessee is 7.84% as against 11% paid to unrelated party. We also find that in his appellate order, .....

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much as under chapter 10, the TPO/A.O. has to see whether the international transaction entered by the assessee is at arm’s length or not. There are other provisions in the act wherein the A.O. can test the genuineness of the transaction but in any case not under Chapter 10 of the Act. As mentioned elsewhere, no comparable case have been brought on record which could justify that the payment of 3% + 1% overriding commission is not at arm’s length, we set aside the findings of the ld. CIT(A) and .....

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gs of the ld. CIT(A) and direct the A.O to delete while computing the book profit u/s. 115JB of the Act. - Inter unit transactions cannot be considered as sales to form part of the total turnover for the computation of deduction u/s. 80HHC of the Act - Disallowance of expenses incurred on behalf of Sun Pharmaceutical Industries taking recourse to the provisions of section 40(b) - Held that:- In our understanding of the law an expenditure is allowable if it is incurred for the purposes o .....

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of the assessee to promote the business of the partnership firm, in the capacity of the majority stake holder. Incidentally, the revenue authorities have not brought anything on record which could suggest that the expenditures have not been incurred for the purposes of business. Be it assessee’s business or the business of the partnership firm where the assessee is a majority stake holder. Therefore, in our considered opinion, the expenditures incurred by the assessee company deserves to be allo .....

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er of the ld. CIT(A)-IV, Ahmedabad dated 31,03,2006 pertaining to A.Y. 2002-03. ITA Nos. 1513 & 1701/Ahd/2007 are cross appeals for A.Y. 2003-04 and ITA Nos. 1193 & 1285/Ahd/2008 are cross appeals for A.Y. 2004-05. 2. All these appeals were heard together as they involved common issues and therefore all these appeals are disposed of by this common order for the sake of convenience. We first take up ITA No. 1158/Ahd/2006 Assessee s appeal for A.Y. 2002-03. The 1st ground relates to the di .....

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ase in ITA No. 3289 & 3434/Ahd/2003 dated 26.03.2015. It is the say of the ld. counsel that on identical set of facts, this issue has been decided in favour of the assessee and against the revenue. The ld. D.R. could not bring any distinguishing decision in favour of the Revenue. We have carefully perused the order of the Tribunal (supra). We find that an identical issue was considered by the Tribunal at Para 4 on page 9 of its order and at Para 4.2 the Tribunal has followed the decision of .....

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ld. Counsel stated that an identical issue has been considered by the Tribunal in assessee s own case for A.Y. 2001-02 wherein the issue has been set aside to the files of the A.O. The ld. counsel prayed for a similar direction should be given for the year under consideration also. The ld. D.R. did not object to this. We find that an identical issue was considered by the Tribunal in assessee s own case for A.Y. 2001-02 at Para 6 on page 12 of ITA Nos. 3289 & 3434/Ahd/2003 and at Para 6.3 the .....

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. 2001-02 and pointed out that a similar issue has been decided in favour of the assessee and against the revenue in ITA Nos. 3289 & 3434/Ahd/2003. The ld. D.R. could not bring any distinguishing decision in favour of the revenue. 9. We find that an identical issue was considered by the Tribunal in A.Y. 2001-02 vide ITA Nos.3289 & 3434/Ahd/2003 (supra). At Para 5 of its order and at Para 5.1 the Tribunal has followed the decision of the coordinate Bench given in assessee s own case for A .....

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ted that the ld. CIT(A) erred in confirming the order of the A.O who has restricted the claim for deduction u/s. 80HHC which is against the facts of the case. We find that the ld. CIT(A) has considered the issue at Para 6 of its order. We also find that the ld. CIT(A) has confirmed the action of the A.O following his own order for A.Y. 2000-01. We find that when the matter travelled up to the Tribunal, the Tribunal in ITA Nos. 1199 & 1279/Ahd/2006 has quashed the reopened assessment holding .....

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he ld. counsel prayed that the matter may be restored to the files of the A.O to be decided in line with the decision of the Hon ble Supreme Court. The D.R. strongly objected to this stating that the issue is squarely covered in favour of the revenue by the decision of the jurisdictional High Court in the case of Atul Intermediates 45 Taxman.com 275 and the same should be followed. 11. We find force in the contention of the ld. D.R. As mentioned elsewhere since there was a dissent between the Ho .....

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s eligible for deduction u/s. 80IB and Section 10B of the Act. 12. We find that while confirming the action of the A.O, the ld. CIT(A) has followed the order of the First Appellate Authority given for A.Y. 2000- 01. As mentioned elsewhere in ground no. 5 above reopened assessment order of 2000-01 has been quashed by the Tribunal in ITA Nos. 1199 & 1279/Ahd/2006. The very basis for confirming the action of the A.O has been removed by the Tribunal. We find that the dispute arose because of the .....

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consideration to the findings of the lower authorities. We have also considered the statement of Dr. T. Rajamannar. Undisputedly, the question related to the raw materials and not to all the items of expenditure under this head. In our considered opinion one cannot carry out the allocation on the basis of pick and choose method. We accordingly direct the A.O to restrict the reallocation only to the raw material, assessee gets partial relief. Ground No. 7 relates to the allocation of selling and .....

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(A) has simply followed the findings given by his predecessor in the appellate order for A.Y. 2000-01. As mentioned elsewhere, the reopened order for A.Y. 2000-01 has been quashed by the Tribunal in ITA Nos. 1199 & 1279/Ahd/2006. Findings of the ld. CIT(A) do not survive. A perusal of the record show that the assessee has allocated the expenses on the basis of turnover which is the most preferred method for allocating selling and distribution expenses. It is a fallacy to say that bulk drugs .....

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issue has been discussed by the A.O at page 28 on Para 6 of his order. The assessee was asked to justify its claim u/s. 35D of the Act. It was explained that an amount of ₹ 22.70 lacs was incurred towards share issue expenses and only 1/5th of the same has been claimed in each assessment year u/s. 35D of the Act. The A.O. did not accept the contention of the assessee stating that in earlier years also, there was disallowance which was confirmed by the ld. CIT(A). Addition of ₹ 4,54, .....

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279/Ahd/2006. Per contra, the ld. D.R. could not add anything new to what has already been recorded by the revenue authorities. 18. We have carefully gone through the impugned orders. Undisputedly, the ld. CIT(A) has simply followed the findings given in A.Y. 2000-01. It is also an admitted fact that the assessment order for A.Y. 2000-01 has been quashed by the Tribunal vide a ITA Nos. 1199 & 1279/Ahd/2006. Thus, it can be said that the very basis for the confirmation of the disallowance has .....

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e assessee has claimed ₹ 14,33,746/- being Public issue expenses u/s. 35D of the Act and ₹ 4,21,754/- as Amalgamation expenses u/s. 35DD of the Act. The assessee was asked to justify its claim. The A.O pointed out that ₹ 4,21,754/- actually pertains to the expenditure incurred towards increase in share capital but the same has been wrongly shown as Amalgamation expenses. Assessee filed a detailed reply stating that it has incurred ₹ 7.50 lacs towards registration charges .....

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O. accordingly made disallowance of ₹ 14,33,746/- + 4,21,754/- totaling to ₹ 18,55,500/-. 20. Assessee carried the matter before the ld. CIT(A). The ld. CIT(A) has considered this issue at Para 20 on page 14 of his order and at Para 20.1 the ld. CIT(A) held that similar ground has been decided against the assessee in the appellate order for A.Y. 2000-01 and accordingly confirmed the disallowance. Before us, the ld. counsel for the assessee stated that the assessment order for A.Y. 20 .....

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In the result, ground no. 9 is allowed. Ground no. 10 relates to the disallowance of ₹ 44,71,906/- being Trade Mark Registration Charges and Overseas Product Registration Charges. 22. This issue has been discussed by the A.O. at length at Para 9 on page 31 of his order. The assessee was asked to justify its claim for Trade Mark Registration and Overseas Product Registration charges which have been incurred for registration of drug patents in foreign Countries. The A.O was of the firm belie .....

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ounsel brought to our notice, the order of the Tribunal by which the assessment order was quashed. The ld. counsel further relied upon decision of the Tribunal Mumbai Benches in the case of USV Ltd. 54 SOT 615. Per contra, the ld. D.R. strongly supported the orders of the revenue authorities. 24. We have carefully perused the orders of the authorities below. We find that the ld. CIT(A) has simply followed the findings of his predecessor for A.Y. 2000-01. We also find that the assessment order fo .....

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71,906/-. Ground no. 10 is accordingly allowed. Ground no. 11 relates to the disallowance of overriding commission paid to Associated Enterprise. 25. This issue relates to the transfer pricing adjustment and hence has been considered by the TPO in its order dated 24.03.2005 made u/s. 92CA(3) of the Act. 26. During the course of transfer pricing assessment proceedings, the TPO noticed that the assessee has paid importing commission towards associate entity amounting to ₹ 335.63 lacs. The as .....

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e of commission works out to 7.84% on total sales and on similar arrangement in India, the assessee has paid commission @ 11% . Therefore the payment is at arm s length. After considering the facts and the submissions, the TPO observed that the assessee has not submitted any documentary evidence in respect of its arrangements with any of these persons. The TPO also observed that the assessee had failed to establish the arms length nature of the transaction under the CUP method. Accordingly, the .....

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tify the margin of the subsidiary company by comparing it with other companies included in similar activities. At this juncture, we have to state that this observation of the TPO is out of context and totally irrelevant because the assessee is the tested party and not its AE. Assessee is transactions have to be considered at arm s length and not the profitability of the AE. The TPO finally concluded by holding that the assessee has failed to discharge the onus laid upon it to determine the arm s .....

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n customers of the associate entity, no evidence has been brought on record to show that the associate entity procured these customers for the benefit of the assessee. Hence, arm s length price for the same is also determined at Nil. (c) Regarding reimbursement of expenses, the amount is accepted as the arm s length price. 28. Assessee carried the matter before the ld. CIT(A). The ld. CIT(A) has considered this issue at Para 23 of its order. After elaborating discussing the findings of the A.O, .....

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After considering the range of commission, the ld. CIT(A) finally was of the opinion that the commission up to 3% was reasonable and at arm length and requires no adjustment and directed the A.O to delete the addition of ₹ 1,43,43,210/-. 29. However, on the point of overriding commission, the ld. CIT(A) was of the opinion that the overriding commission is to be allowed on the sales made through AE, overriding commission is also to be allowed on the sales made through non -related parties .....

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authorities is to see whether the international transaction entered into by the assessee are at arm s length or not. The ld. counsel further stated that it is not open to the revenue authorities under Chapter 10 to see whether any services have been rendered by the AE or not. The ld. counsel concluded by saying that if the revenue authorities are of the opinion that no services have been rendered the disallowance can be made under other provisions of the Act. Per contra, the ld. D.R. strongly su .....

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hat in his appellate order, the First Appellate Authority has observed the rate of commission ranging from 0.38% to 33.33%, the assessee s rate is at 3%. We also find that none of the revenue authorities below have brought any comparable case on record to show that the payment of commission by the assessee is not at arm s length. On the contrary, we find that the A.O. has disallowed merely because he was of the opinion that no services have been rendered. This finding is beyond the provisions of .....

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ndings of the ld. CIT(A) and direct the A.O. to delete the entire transfer pricing adjustment made by it. Ground no. 11 is accordingly allowed. Ground no. 12 relates to the computation of deduction u/s. 80HHC on the basis of book profit for computing MAT. 32. The A.O has considered this issue at Para 14A on page 35 of his order and at page 36, the A.O followed the decision of the ld. CIT(A) given in earlier years. Ld. CIT(A) has considered the grievance of the assessee at Para 25 on page 37 of h .....

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n in assessee s own case in the past for A.Y. 1999-2000 in ITA No. 3047 & 3272/Ahd/2002 wherein the co-ordinate Bench has followed the decision of the Hon ble Supreme Court in the case of Ajanta Pharma 327 ITR 305, Bhari Information Tech Systems (P) Ltd. 340 ITR 593 and Syncome Formulations Ltd. 292 ITR 144. Respectfully, following the findings given by the co-ordinate Bench of the Tribunal and following the past directions of the Tribunal, we refer this issue back to the files of A.O to be .....

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this ground is accordingly dismissed. 34. Ground no. 14 relates to the addition of Deferred Tax Provision u/s. 115JB of the Act. Once again, the ld. counsel for the assessee stated that due to the retrospective amendment brought to in Clause (viii) of 115JB, this issue may also be decided against the assessee and in favour of the revenue. Considering the retrospective amendment and on the basis of the concession made this ground is dismissed. Ground no. 15 relates to the disallowance of investm .....

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ff and not a provision. A.O did not accept this contention and added ₹ 2,63,76,778/- to the book profit u/s. 115JB of the Act. 36. Aggrieved by which the assessee carried the matter before ld. CIT(A) but without any success. Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. Per contra, the ld. D.R. strongly submitted that due to the amendment brought in Section 115JB, the provisions made by the assessee cannot be allowed and have to b .....

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d that the revenue authorities have failed to appreciate the facts in the right perspective. It is the say of the ld. counsel that the said amendment referred by the ld. D.R. is not applicable to the facts of the case and simultaneously, the decisions relied upon by the ld. D.R. are misplaced. 37. We have given a thoughtful consideration to the facts in issue. There is no doubt that the assessee has written off the investments made in MJPL. Thus, it can be said with certainty that no provision h .....

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ussing the grievance of the assessee at Para 30.3 and also at Para 32.2 of his order, the ld. CIT(A) has observed that these grounds of appeal are not emanating from the action of the A.O. hence, cannot be entertained at this stage. Before us, the ld. counsel for the assessee stated that legal issues can be taken up at any stage and the appellate authorities are bound to consider such legal issues. We find force in the contention of the ld. counsel since both these grounds relates to legal issue .....

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being heard to the assessee and as per the provisions of the law. Ground no. 17 relates to the inclusion of income from scrap sale, miscellaneous income and interest on loans to employees from profits computed u/s. 80IB of the Act. 39. In so far as, inclusion of sale of scrap is concerned, we find that the Tribunal in its order in ITA Nos. 3289 & 3434/Ahd/2003 in assessee s own case for A.Y. 2001-02 has followed the findings of the Tribunal given in A.Y. 1999-2000 & 2000-01 and directed .....

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8. Ground no. 17 is accordingly allowed. 40. In the result, the appeal filed by the assessee is allowed in part for statistical purposes. ITA No. 1676/Ahd/2006 Revenue s appeal The 1st ground relates to the grant of deduction u/s. 80HHC after excluding excise duty and sales- tax from turnover. 41. While computing the assessed income, the A.O has included excise duty and sales tax in the total turnover for calculating deduction u/s. 80HHC of the Act. When the matter was agitated before the ld. CI .....

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he Hon ble Supreme Court (supra), we confirm the findings of ld. CIT(A), ground no. 1 is accordingly dismissed. Ground No. 2 relates to the grant of deduction u/s. 80HHC without including insurance claim in total turnover. 42. The A.O has discussed this issue at Para 4F on page 7 of his order wherein he has included the insurance claim as part of the total turnover. The ld. CIT(A) has considered this grievance at Para 11 on page 5 of his order and at Para 11.1, the ld. CIT(A) has followed the de .....

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for computing deduction u/s. 80HHC of the Act. 43. We find that the ld. CIT(A) has followed the findings given in A.Y. 2001- 02 which has been considered by the Tribunal in ITA Nos. 3289 & 3434/Ahd/2003. The Tribunal has considered an identical issue at Para 16 of its order and at Para 17.1, the Tribunal has followed its own order for A.Y. 2000-01 and dismissed revenue s ground. As no new facts have been brought before us. Respectfully, following the findings of the co-ordinate Bench, groun .....

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d. CIT(A). Ground no. 4 is accordingly dismissed. Ground no. 5 relates to the reallocation of corporate office expenses amongst various units for computing profits eligible for deduction u/s. 80IB. 45. An identical issue has been decided by us in assessee s appeal (supra) vide ground no. 7 of that appeal. For our detailed discussion therein this ground is decided accordingly. 46. Ground nos. 6 & 7 relates to the Transfer Pricing issues. The Transfer Pricing issues have been discussed at leng .....

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ntrol (P) Ltd. 267 ITR 396. Ground no. 8 is accordingly dismissed. 48. In the result, the appeal filed by the revenue is partly allowed. ITA No. 1513 assessee s appeal for A.Y. 2003-04. Ground no. 1 relates to the treatment of balance under EEFC account as part of total turnover. 49. An identical issue was decided by us in A.Y. 2002-03 vide ITA No. 1558/Ahd/2006 qua ground no. 2 of that appeal. Respectfully, following our own decision, we set aside the findings of the ld. CIT(A) and allow this g .....

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Similar is the issue taken up in ground no. 4 and for similar reasons following our own order given in A.Y. 2002-03 (supra), we decide accordingly. Ground no. 5 relates to the reallocation of expenses of R & D for computing deduction u/s. 80IB. 52. Similar issue has been considered by us in ITA No. 1558/Ahd/2006 qua ground no. 6 of that appeal. For similar reasons, we decide this ground accordingly. Ground no. 6 relates to the disallowance of expenses for increase in share capital. 53. This .....

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disallowance of trade mark registration charges and overseas product registration charges u/s. 35(2AB) of the Act. 55. Similar issue has been decided by us in ITA NO. 1558/Ahd/2006 qua ground no. 10 of that appeal. For our detailed discussion therein this ground is decided accordingly. 56. Ground no. 9 relates to the Transfer Pricing issues. Similar Transfer Pricing adjustment has been considered by us in ITA No. 1558/Ahd/2006 qua ground no. 11. For our detailed discussion therein this ground is .....

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. 14 of that appeal. For similar reasons, this ground is decided accordingly. Ground no. 13 is of general in nature and needs no separate adjudication. 60. In the result, the appeal filed by the assessee is allowed in part for statistical purposes. ITA No. 1701/Ahd/2007 revenue s appeal for A.Y. 2003-04. Ground no. 1 relates to the grant of deduction u/s. 80HHC after excluding excise duty and sales-tax from turnover. 61. Similar issue has been decided in A.Y. 2002-03 in ITA NO. 1676/Ahd/2006 qua .....

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ross lease rent for computing deduction u/s. 80HHC. 63. Similar issues are decided in ITA No. 1676/Ahd/2006 qua ground no. 3 of that appeal. Respectfully, following our own decision this ground is decided accordingly. Ground no. 4 relates to the grant of deduction u/s. 80HHC by netting interest income. 64. An identical issue has been considered by us in A.Y. 2002-03 in ITA No. 1676/Ahd/2006 qua ground no. 4 of that appeal. For similar reasons this ground is decided accordingly. Ground no. 5 rela .....

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e company as a whole the products manufactured by one unit by the company are transferred/captively used by the other units of the company. Hence, there is no sale per say accordingly the inter unit sales should not be included in total turnover. The reply of the assessee did not find favour with the A.O who proceeded by including the inter unit sales in the total turnover for the purpose of computation of deduction u/s. 80HHC of the Act. 66. Assessee carried the matter before the ld. CIT(A) and .....

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before us. At the very outset, we have to state that nobody can do business with its own self meaning thereby that a person cannot sell goods to itself. Even under the sale of goods act such transaction are not considered as sales. 67. Therefore in our considered opinion the inter unit transactions cannot be considered as sales to form part of the total turnover for the computation of deduction u/s. 80HHC of the Act. We therefore, decline to interfere with the finding of ld. CIT(A). Ground no. 5 .....

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al issue was considered by us in ITA No. 1558/Ahd/2006 qua ground no. 18 of that appeal. Following our own findings therein, we decide this ground accordingly. Ground no. 10 relates to the direction to the A.O not to exclude interest on Overdue bills from gross sales for computation of deduction u/s. 80IB of the Act. 70. In our considered opinion, this issue is squarely covered in favour of the assessee and against the revenue by the decision of the Hon ble jurisdictional High Court in the case .....

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ount of overriding commission paid to Associated Enterprise. 74. This issue has been discussed by us in detail in ITA No. 1558/Ahd/2006 qua ground no. 11 of that appeal. For our detailed discussion therein, this ground is decided accordingly. 75. Ground no. 3 has not been pressed and the same is dismissed as not pressed. Ground no. 4 relates to the disallowance of public issue expenses and amalgamation expenses. 76. Similar issues have been considered by us in ITA NO. 1558/Ahd/2006 qua ground no .....

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milar issue has been decided by us in ITA No. 1558/Ahd/2006 qua ground no. 17 of that appeal. For our detailed discussion therein, this ground is decided accordingly. Ground no. 7 relates to the reallocation of expenses of R & D for computing deduction u/s. 80IB of the Act. 79. Similar issues were there in ITA No. 1558/Ahd/2006 qua ground no. 6 of that appeal. For the reasons therein, this ground is decided accordingly. Ground no. 8 relates to the treatment of balance under EEFC account as p .....

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f Deferred Tax provision u/s. 115JB and prior period adjustment for deferred tax. 82. An identical issue was considered by us in ITA No. 1558/Ahd/2006 qua ground no. 14 of that appeal. For similar reasons, this ground is decided accordingly. Ground no. 12 relates to the addition made on account of sales to Sun Pharmaceutical Industries. 83. This issue has been considered by the A.O at Para 12 of his order. A survey u/s. 133A of the Act was conducted on the assessee as well as its sister concern .....

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ysis of the reply, the A.O found that there were certain raw materials/products which were being sold to the sister concern at a lower rate than sold to third parties. The A.O proceeded by computing an addition of ₹ 19,49,930/- on account of unreasonably low selling price on sale of raw materials/products sold to its sister concern. 84. Aggrieved by this, assessee carried the matter before the ld. CIT(A) but without any success. 85. Before us, the ld. counsel for the assessee stated that i .....

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additions. A perusal of the assessment order show that the additions have been made by treating the transactions u/s. 40A(2) of the Act. In that case, we have to state that provisions of section 40A(2) are applicable only in respect of payments made to related parties mentioned therein. But the transaction before us is of credit in nature i.e. sales so provisions of section 40A(2) are not at all applicable. 87. If the transactions are looked upon keeping in sight the provisions of section 80IB/8 .....

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Industries. 88. This issue has been discussed by the A.O at para 13 of his order wherein he has mentioned that during the course of survey operations. A copy of partnership deed between the assessee and Sun Pharmaceutical Industries (SPI) was found along with a copy of supplementary partnership deed. The A.O further observed that as per the partnership deed, the assessee was entitled to draw yearly remuneration of 15% of the net profits of the partnership firm. The A.O further observed that the .....

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of the partnership firm in its books of account. The A.O was of the firm belief that these expenditures are not related to the earning of income and accordingly disallowed - (a) selling and distribution expenses 25,68,21,928/- salary and allowance to field staff 24,12,98,724/- totaling to ₹ 49,81,20,652/-. The A.O proceeded by disallowing ₹ 8,49,79,383/- based on the ratio of the total turnover of the assessee and the partnership firm SPI. 90. Aggrieved by this, the assessee carried .....

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hat most of the expenses incurred by the assessee for the sales were in the nature of fixed expenses. However, there were similar additional expenses incurred by the assessee for carrying out the sales for and on behalf of the partnership firm. The ld. CIT(A) finally concluded by holding that the incremental expenses incurred by the assessee in excess what was incurred in the preceding year towards the marketing and distribution should be allocated and accordingly directed the A.O to recalculate .....

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The D.R. concluded by saying that there is no error in the findings of the A.O. Per contra, the ld. counsel for the assessee reiterated the claim and stated that there is no basis for allocating the expenses pro rata. The ld. counsel further stated that the First Appellate Authority further erred in disallowing the expenditure on pro rata basis only on incremental expenses. It is the say of the ld. counsel that the disallowance is unjustifiable. 92. We have carefully perused the orders of the a .....

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assessee could not have shown this remuneration as part of its computation of income. It is also a fact that the partnership firm has also not debited this remuneration to its Profit and Loss account. However, the assessee company using its network has incurred certain expenditure which according to the revenue authorities are not directly related to earning of income. In our understanding of the law an expenditure is allowable if it is incurred for the purposes of the business of the assessee a .....

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s of the partnership firm, in the capacity of the majority stake holder. Incidentally, the revenue authorities have not brought anything on record which could suggest that the expenditures have not been incurred for the purposes of business. Be it assessee s business or the business of the partnership firm where the assessee is a majority stake holder. Therefore, in our considered opinion, the expenditures incurred by the assessee company deserves to be allowed and we direct the A.O to delete th .....

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und is decided accordingly. 95. Ground no. 15 is of general in nature and needs no separate adjudication. ITA No. 1287/Ahd/2008 revenue s appeal for A.Y. 2004-05. Ground no. 1 relates to the transfer pricing adjustments. 96. This issue has been discussed at length by us in ITA No. 1558/Ahd/2006 qua ground no. 11 of that appeal. For our detailed discussion therein, this ground is decided accordingly. Ground no. 2 relates to the grant of exemption u/s. 10B to Panoli and Ahmednagar unit . 97. This .....

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of the assessee and against the revenue. However, the A.O is free to take a different view in the relevant assessment year, ground nos. 2 & 3 are dismissed. Ground no. 4 relates to the deletion of the addition on account of deduction u/s. 80IB. 98. This ground is consequential to the above ground and is decided accordingly. Ground no. 5 relates to the reallocation of R & D expenses. 99. This issue has been discussed at length by us in ITA No. 1558/Ahd/2006 qua ground no. 6 of that appeal .....

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ered vide a ground no. 9 in assessee s appeal for A.Y. 2002-03 in ITA No. 1558/Ahd/06. For the reasons given therein, this ground is decided accordingly. Ground no. 8 relates to the consideration of net lease rent instead of gross lease rent for computing deduction u/s. 80HHC of the Act. 102. An identical issue was considered by us in revenue s appeal for A.Y. 2002-03 in ITA No. 1676/Ahd/2006 qua ground no. 3 of that appeal. For the reasons given therein, this ground is decided accordingly. Grou .....

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