TaxTMI 
TaxTMI 
2010 (5) TMI 702
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the addition made under section 43B(b) of the Income-tax Act, 1961, amounting to Rs. 21,31,56,460 being the provision for pension based on actuarial valuation. 2. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the disallowance of Rs. 40,00,000 in respect of contribution to Ranbaxy Community Health Care Society and Rs. 14,00,000 made to Ranbaxy Science Foundation. 3. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the disallowance under section 37 in respect of demand raised by National Pharmaceuticals Pricing Authority (NPAA) amounting to Rs. 4,54,86,909 on cefazoline based formulations. 4. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the disallowance under section 37 in respect of demand raised by National Pharmaceuticals Pricing Authority (NPAA) amounting to Rs. 4,65,08,333 on cloxacillin based formulations. 5. On the facts and in the circ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Tribunal has held as under : "16. We have carefully considered the rival submissions. This issue is found to be covered by the aforementioned decision of the Tribunal in the assessee's own case for the assessment year 1999-2000. For the sake of clarity the relevant portion from the said order is reproduced below: The next dispute in the Revenue's appeal for the assessment year 1999-2000 relates to disallowance of Rs. 1,99,73,822 made by the Assessing Officer by applying the provisions of section 43B(b) on account of the provision for pension. We have heard both the sides and gone through the records. Earlier the assessee was having a superannuation scheme with the LIC wherein the contributions were made at certain percentage of salaries of the employees. The pension payable under the said superannuation scheme was found to be too low and the assessee found it difficult to attract and retain management of employees. A new pension scheme was introduced with effect from November 1, 1997. This pension was applicable to all management employees and was non-funded. In other words, no separate fund was created and the pension was payable to the emplo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court. Thus, the demand had not only arisen during the year but it was a quantified and crystallised demand enforceable in law. Thus, it was a statutory liability which was to be paid by the assessee within the stipulated time saved if otherwise directed by higher court. Disputing the payment of liability by way of an appeal does not disentitle the assessee to claim that demand as an expenditure as what is sought by the assessee who is disputing the liability is a relief from higher court. Suppose if higher court gives some relief to the assessee and deduction is already granted to the assessee in a particular year, section 41(1) is there to take care of the relief got by the assessee by way of an appellate order. Thus, there is no loss to the Revenue when deduction with respect to statutory liability which has arisen and crystallised during the year is allowed. 52. In view of the above discussion, we find no infirmity in the order of the Commissioner of Income-tax (Appeals) vide which he has held that such liability being arisen and crystallised during the year should have been allowed to the assessee. The case law relied upon by the learned Commissioner of Income-tax (Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roved research facilities and directly engaged in the research and development activities. The Assessing Officer, it may be pointed out, did not accept the claim of the assessee in respect of weighted deduction, without any discussion in his order. There is no dispute that the expenditure in question was incurred by the assessee in respect of research and development facilities which have been duly approved by the prescribed authority under section 35(2AB). Therefore, the assessee is clearly entitled to weighted deduction. It was also reported to us at the time of hearing that the Commissioner of Income-tax (Appeals) directed weighted deduction under section 35(2AB) while dealing with the claim of the assessee for the assessment year 2001-02 in respect of similar expenses. There is no reason to deny the same in the year in question. Accordingly, we direct the Assessing Officer to allow the weighted deduction in respect of these expenses under section 35(2AB) of the Act." 8.1 Respectfully following the precedent, we uphold the order of the learned Commissioner of Income-tax (Appeals) and decide the issue in favour of the assessee. 9. Ground No. 6 of the Revenue's appeal an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to short receipt of share premium. The receipt of share premium is not taxable and hence any short receipt of such premium will only be a notional loss and not actual loss for which no liability is incurred. SEBI guidelines are relevant for the purpose of accounting but are not conclusive for the purpose of allowing the same as expenditure. In a case where the assessee contracts for sale of goods say at Rs. 100 per piece as against market price of Rs. 150 per piece, whether, the loss of Rs. 50 can be said to be allowable where the assessee accounts for only Rs.100 as sales not at Rs. 150. In such a situation, the loss will be only a notional loss or the loss of possible benefit but not the loss or liability incurred so as to be held as allowable under the scheme of the Income-tax Act. Similarly in the present case what is loss to the assessee is short receipt of share premium and not incurring any liability or loss in the course of carrying on the business. Therefore, such notional losses are not allowable under the Act. The assessee is not to defray or pay any liability under the claim. Therefore, such notional loss cannot be held to be allowable under the scheme of the Act." 9....