TMI Blog2015 (1) TMI 1486X X X X Extracts X X X X X X X X Extracts X X X X ..... ts products. Similar expenditure was considered in Cadila Healthcare Ltd. [ 2013 (3) TMI 539 - GUJARAT HIGH COURT ] wherein it was held that such payments should be considered in the revenue field. No decision of any other High Court, wherein contrary view taken, was placed before us by the Revenue. Thus hold that the view taken by Hon'ble Gujarat High Court is in accordance with law. In the result, ground No. 1 of the Revenue is dismissed. MAT credit u/s. 115JA - AO had reduced the MAT credit to Nil due to additions/disallowances made during scrutiny assessment for A.Y. 2006-07 - While computing the tax liability the Assessing Officer set off the amount of MAT credit excluding surcharge and cess from the amount of tax payable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts pharma Products, from the foreign Drug Regulatory Authorities is a Revenue expenditure, ignoring the fact that only on receipt of this certificate the assessee is enabled to sell its Active Pharmaceutical Ingredients in Europe and America , as this COS certifies that stringent quality standards of goods supplied by the assessee are met with. 2. Whether in the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in directing the AO to follow the rule of consistency in A.Y. 2006-07 and allow MAT credit which includes surcharge and cess, though no proceeding relating to A.Y. 2006-07 was pending before him either by way of appeal/rectification/revision. 3. The appellant prays that the order of Ld. CIT(A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untries. Thus, expenditure is recurring in nature, since it is a regular feature in the nature of business. He also relied upon various case law in support of his contention that such expenditure has to be allowed as revenue in nature. In particular he submitted that not every advantage of enduring nature constitutes capital in nature, if the advantage consists merely in facilitating the assessee s trading operations or enabling the management and conduct of the assessee s business to be carried on more efficiently or more profitably while leaving the fixed capital untouched. 5. Learned CIT(A) considered the issue at great length in para 5 of his order. While distinguishing the case laws relied upon by the Assessing Officer, learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the assessee relied upon the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Cadila Healthcare Ltd. (263 CTR 686), wherein under identical circumstances Hon ble Court observed that expenditure incurred towards product registration and payment made thereon to the Drug Regulatory Authorities should be considered as revenue in nature. He also referred to the decision of ITAT, A Bench, Ahmedabad to highlight the facts which were considered by Hon ble Gujarat High Court. 7. We have carefully considered the rival submissions and perused the record. Admittedly the expenditure incurred is not preproduction expenditure. The assessee has been marketing products elsewhere and thus it can be said that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer before levy of surcharge and education cess and the same has been set off against tax payable after surcharge and cess. This is against principle of consistency. Learned CIT(A) considered the issue in para 8 of his order and observed as under :- 8.4 I have gone through the submissions made by the Appellant. In A.Y. 2006-07, the appellant has contested the additions made before the higher appellate authorities. The appellant has requested for grant of relief in respect of MAT credit, in case, relief is granted by the higher authorities. In my opinion, there is no need to adjudicate upon this request of the appellant as such relief would be automatic. The Assessing Officer shall consider the relief granted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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