2014 (6) TMI 438

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....(A.Ys.) 2006-07, 2007-08 & 2008- 09. The issue arising for consideration in the present case being common, the appeals were taken up together for hearing, and are being disposed of vide a common, consolidated order. 2. The facts of the case are simple and largely undisputed. The appellant-company, a manufacturer of drugs, is a research-based company. It supports doctor's activities in epidemiological data research, training for research, infrastructure for research like memory clinic. The appellant also supports 'Alzheimer and Related Disorders Society of India' [ARDSI], an NGO dedicated to Dementia activity in community research to ascertain incidence. The assessee-appellant entered into an Agreement dated January 1, 2005 with Eisai Co.....

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....nd for which reference was made to the definition of the term as provided u/s. 43(4). It is this that would hold, regardless of the nomenclature employed to describe it under the agreement. The assessee had actually only conducted market survey/s to find out the number of patients suffering from Alzheimer's disease in India. That apart, the assessee's activity, in the context of the present case, would only mean that it had to keep trying various permutations and combinations till the desired result is achieved and the formula so developed accords with the requirements of the parent company. The same could not be considered as scientific research for the purpose of its own business, deductible u/s. 35(1). The assessee's claim could not alte....

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....(as it would only be for that incurred and claimed for A.Y. 2006-07), as toward pre-operative expenditure? In-asmuch as the expenditure by way of sponsoring the activity of the NGOs (as ARDSI) also forms part of the Agreement dated 01.01.2005, though, as explained by the ld. AR, not subject to a mark-up of 10%, as is the expenditure incurred directly by the assessee, the same cannot be considered as donation, as considered by the Revenue. At best, it is an expenditure on a related activity and, further, being reimbursable in full under the agreement, no expenditure in fact can be said to have been at all incurred or claimed by the assessee. So, however, even as observed during the hearing, there being no finding by the authorities below ....