TMI Blog2015 (2) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... wn case is against the assessee but as pointed out elsewhere the decision of the Hon ble Gujarat High Court in Cadila Healthcare [ 2013 (3) TMI 539 - GUJARAT HIGH COURT] was pronounced later on and therefore the Tribunal did not have the benefit of the decision of the Hon ble Gujarat High Court. Now that we have the benefit of the decision of the Hon ble Gujarat High Court as mentioned hereinabove, we are following the decision of the Hon ble Gujarat High Court and accordingly we set aside the findings of the Ld. CIT(A) and direct the AO to allow the claim of weighted deduction u/s. 35(2AB) in respect of clinical trials as claimed by the assessee. Ground No. 1 is accordingly allowed. Weighted deduction in respect of (a) consultancy fees (b) patent fees as per patent Act and PCT and (c) patent filing fees not as per patent Act. - HELD THAT:- The claim of weighted deduction in respect of consultancy fees and patent filing fees as per patent Act are concerned, the Tribunal has considered this issue in A.Y. 2007-08 [ 2012 (9) TMI 43 - ITAT MUMBAI] The Tribunal has considered this issue at para 33 of its order and at para-34 allowed the claim. As no distinguishing facts have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods supplied by the undertaking partakes of the same nature and character as the sale consideration . The delayed payment charges consequently satisfy, together with the sale price, the first degree test Liberty India [ 2009 (8) TMI 63 - SUPREME COURT] We, direct the AO to allow the claim of deduction in respect of interest from customers u/s. 80IB and 80IC of the Act in respect of the eligible units. Additional ground in respect of deduction u/s. 35(2AB) on gross expenditure without reducing (a) income from sale of products from R D work (b) income from sale of R D assets - HELD THAT:- This claim is being made for the first time before the Tribunal and never claimed in the return of income. The Hon ble Jurisdictional High Court of Bombay in the case of CIT Vs Pruthvi Brokers Shareholders Pvt. Ltd. [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] has held that the assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims to which claims not made in the return filed by it wherein the Hon ble High Court has followed the ratio laid down by the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. [ 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory authority under any Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970 (39 of 1970). Such explanation thus provides that for the purpose of said clause, i.e. clause (1) of section 35(2AB), expenditure on scientific research in relation to drugs and pharmaceuticals shall include expenditure incurred on clinical drug trial, obtaining approval from any regulatory authority under the Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970. The whole idea thus appears to be to give encouragement to scientific research. By the very nature of things, clinical trials may not always be possible to be conducted in closed laboratory or in similar in-house facility provided by the assessee and approved by the prescribed authority. Before a pharmaceutical drug could be put in the market, the regulatory authorities would insist on strict tests and research on all possible aspects, such as possible reactions, effect of the drug and so on. Extensive clinical trials, therefore, would be an intrinsic part of development of any such new pharmaceutical drug. It cannot be imagined that such clinical trial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Hon ble Gujarat High Court. Now that we have the benefit of the decision of the Hon ble Gujarat High Court as mentioned hereinabove, we are following the decision of the Hon ble Gujarat High Court and accordingly we set aside the findings of the Ld. CIT(A) and direct the AO to allow the claim of weighted deduction u/s. 35(2AB) in respect of clinical trials as claimed by the assessee. Ground No. 1 is accordingly allowed. 4. Ground No. 2 relates to the non allowance of weighted deduction in respect of (a) consultancy fees (b) patent fees as per patent Act and PCT and (c) patent filing fees not as per patent Act. In so far as the claim of weighted deduction in respect of consultancy fees and patent filing fees as per patent Act are concerned, the Tribunal has considered this issue in A.Y. 2007-08 vide ITA No. 4517 5582/M/2010. The Tribunal has considered this issue at para 33 of its order and at para-34 allowed the claim. As no distinguishing facts have been brought on record, respectfully following the decision of the Co ordinate Bench, weighted deduction on consultancy fees and patent filing fees as per patent Act are directed to be allowed. 4.1. In so f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l purpose. 7. Ground No. 4 5 are inter linked and relates to the non allowance of deduction u/s. 80IB and 80IC of the Act on interest from customers of eligible unit. 7.1. 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 of CIT Vs Vidyut Corporation 324 ITR 221 wherein the Hon ble High Court has held as under: In substance and in essence, what is received by the assessee from the purchaser is a component of interest towards delayed payment of the price of the goods sold, supplied and delivered by the assessee, There can be no dispute about the position that the price realized by the assessee from the sale of goods manufactured by the industrial undertaking constitutes a component of the profits and gains derived from the eligible business. The purchaser, on account of the delay in payment of the sale price also pays to the assessee interest. This forms a component of the sale price and is paid towards the lag which has occurred in the payment of the price of the goods sold by the assessee. On these facts, therefore, the payment of interest on account of the delay in paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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