TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1200
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....of appeal:- GROUND NO- I: DISALLOWANCE OF PAYMENTS MADE TO PIRAMAL CORPORATE SERVICES LTD (FORMERLY KNOWN AS PIRAMAL ENTERPRISES LTD) (PCSL) OF Rs. 2,03,08,000/- 1. On, the facts and in the circumstances of the case and in law. the AO erred in following the erroneous direction of Dispute Resolution Panel ('the DRP") in disallowing part of payment made to PCSL of Rs. 2,03,08,000/- on the alleged ground that same is not wholly and exclusively for the purpose of business. 2. The Appellant prays that disallowance of payments made to PCSL amounting to Rs. 2,03,08,000/- be deleted. GROUND NO. II: DISALLOWANCE OF SOFTWARE EXPENSES AMOUNTING TO Rs. 25,01,579/- 1. ON the facts and in circumstances of the case and in law the AO erred in following the erroneous direction of DRP in disallowing software expenses claimed under the head "Repairs - Computer - Others" and "Repairs - Computer - Annual Maintenance" on the alleged jocund that the said expenses are capital in nature and has long term benefits. 2. The Appellant prays that the AO be directed to treat expenditure incurred on software as revenue expenditure. 3. Without prejudice, the AO is directed to allow depreciation @....
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....t to have held that the depreciation chart for AY 1997-98 was submitted before him. 3. On the feels and in the circumstances of the case and in law, the AO erred in Mewing the erroneous direction of the DRP in recomputing depreciation allowable in respect of assets of Pharma Division taken over from Piramal Holdings Ltd. in a manner different from the one calculated by the Appellant. 4. The AO further erred in reducing from the block of assets the sale value as recorded in the books of purchasing company pertaining to glass division and bulk drug division sold in A.Y, 1999-00 on slump sale basis on the alleged ground that the AO has considered it as itemized sale of assets. 5. The Appellant pays that the AO be directed to allow depreciation as claimed in Return of income. GROUND NO. VI: ADJUSTMENT OF INVENTORV AS PER SECTION 145A OF THE ACT AMOUNTING TO Rs. 1,20,83,000/-: 1. On the facts and circumstances of the case and in law, the AO erred in following the erroneous direction of the DRP in re-computing value of closing stock at Rs. 17,939.52 lakhs as against Rs. 17,018 lakhs and opening stock at Rs. 15,654.69 lakhs as against Rs. 14,834 lakhs on the ground that the Appe....
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....t to have held that the * Research and development expenditure are incurred mainly on Process Development for customs manufacturing (PDG) and it has no connection directly or indirectly with the manufacturing activity carried out at Baddi unit. * The assesses has not made any borrowing specifically for the purpose of setting Baddi unit and it working capital requirement is met by the cash or fund generated in the unit. * The Appellant prays that the AO be directed not to allocate research and development expenditure of Rs. 11,23,00,000/- and interest expenditure of Rs. 11,02,00,000/- to the Baddi Unit. GROUND NO. X : ELIGIBILITY OF DEDUCTION UNDER SECTION 80IC OF THE ACT; 1. On the facts sad circumstance of the case and in law, the AO erred in following the erroneous direction of the DRP in disallowing the deduction of Rs. 3,73,57,78,443/- claimed u/s. 80IC in respect of Baddi Unit on the alleged ground that the Baddi Unit is not eligible for deduction u/s. 80IC relying on the order for AY 2008-09. 2. The AO failed to appreciate and ought to have held that the Baddi unit had been formed in AY 2007-08 by introducing fresh capital and purchasing new plant and machinery an....
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....ok profit computed u/s. 115JB of the Act. 2. The AO failed to appreciate and ought to have held that the disallowance made under sub-sections (2) and (3) of section 14A is not to be added while computing the book profits u/s. 115JB of the Act in the absence of any express provision for the same' in section 115JB. 3. Therefore, the Appellant prays that the AO be directed not to add the expanses computed u/s. 14A of the Act to the book profit u/s. 115JB. GROUND NO. XIV: GENERAL Appellant craves leave to add, amend, alter and/or delete any/all of the above ground of appeal. 3. The first issue that came up for our consideration from ground No. 1 of assessee appeal is disallowances of payments made to Piramal Corporate Services Limited (PCSL) of Rs. 2,03,08,000/-. The relevant facts of the impugned disputes are that PCSL is the flagship company of the Piramal group and is responsible for maintaining and furthering the image of the group and ensuring consistent quality of management of the group companies, including the assessee company. Pursuant to an agreement, dated 29/04/1995, PCSL is to provide certain services against reimbursement of actual expenses by the group conce....
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.... The relevant findings of the Tribunal are as under:- 21. We have considered rival submissions and perused materials on record. On a reading of the agreement dated 29th April 1995 with PEL a copy of which is at Page-859 of the paper book, it is noticed that in addition to the reimbursement of expenses incurred by PEL on behalf of the assessee, the assessee was also required to pay to PEL royalty @ not exceeding 0.5% of his turnover of goods manufacture and traded. Thus, it is evident that the payment made of ' 822 crore to PEL constitutes both reimbursement of expenses and royalty. This fact is also clear from the working of reimbursement of expenses and royalty at Page-237 of the paper book, which indicates that an amount of ' 6.75 crore was for reimbursement of expenses and ' 1.47 crore towards royalty. From the assessment order, prima-facie, it appears that the Assessing Officer while concluding that PEL has charged more to the assessee towards reimbursement of expenses than what is contemplated in the agreement is under a misconception of fact. However, in the order giving effect to the direction of the Commissioner (Appeals), the Assessing Officer has allowed the....
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.... as under:- 11. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to subscribe to the view taken by the lower authorities. We find that the issue that expenses incurred by an assessee on purchase of a software which brought greater efficiency in functioning of its business had been held by the Hon'ble High Court of Bombay in the case of PCIT Vs. Holicin Services (South Asia) Ltd. (2018) 93 Taxmann.com 270 (Bom), as allowable as a revenue expenditure. Further, the Hon'ble High Court of Bombay in the case of CIT Vs. Raychem RPG Ltd. (2012) 346 ITR 138 (Bom) had observed that the expenditure incurred by an assessee on purchase of a software which facilitated its trading operations or enabled the management to conduct its business more efficiently or more profitably would not form part of the profit making apparatus of the assessee and would be allowable as a revenue expenditure. Also, we find that a similar view had also been taken by the Hon'ble High Court of Delhi in the case of CIT Vs. Amway India Enterprises (2012) 346 ITR 341 (Del). In the aforesaid case, it was observed by the High Court that the expenditure incurre....
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....the assessee to furnish required approval in form 3CM from the competent authority. The relevant findings of the Tribunal are as under:- 13. Admittedly, the issue pertaining to the entitlement of the assessee towards claim of weighted deduction under Sec. 35(2AB) is a recurring issue which was also involved in its case for the immediately preceding year i.e A.Y. 2008-09. We find that the Tribunal while disposing off the appeal of the assessee for the immediately preceding year i.e A.Y. 2008-09, had after considering the contention of the assessee that it had applied for approval in "Form 3CM" which was still pending, restored the issue to the A.O. for providing an opportunity to the assessee to furnish the approval of the competent authority in the prescribed manner for claiming the deduction under Sec. 35(2AB) of the I-T Act. In fact, the ld. A.R by taking support of the observations of the Tribunal in the assesses own case for A.Y. 2008-09, had requested that the matter as regards the entitlement of the assessee towards the claim of deduction under Sec. 35(2AB) may be restored to the file of the A.O. in the same terms, with a direction to the A.O. to provide an opportunity to t....
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.... ITAT, Mumbai bench in assessee's own case for AY 2009-10, where under identical set of facts, the Tribunal held that the assessee is entitled for depreciation @ 60% on up gradation of software. The Ld. DR, on the other hand, fairly accepted that the issue is covered in favour of the assessee by the decision of ITAT for earlier years. But, he strongly supported the findings of the Ld. AO, as well as the Ld. DRP. 16. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that the co-ordinate bench had considered an identical issue for AY 2009-10 and after considering relevant facts and also, by following the decision of Hon'ble Bombay High Court, in the case of CIT vs Saraswath Infotech Ltd. in ITA No. 124 of 2012 dated 15/01/2013 held that the assessee is entitled for 60% depreciation on computer software and up gradation of existing software. The relevant findings of the Tribunal are as under:- 15. We find that the issue before us is as to whether an independent purchase of software which admittedly formed part of the profit making apparatus of the assesses business and was capitalized in its "b....
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....laim of depreciation pertaining to BMIL and PHL of Rs. 94,43,089/-. The Ld. AR for the assessee submitted that this issue is covered in favour of the assessee by the decision of ITAT for AY 2008-09 and 2009-10, where under identical set of facts, the Tribunal has allowed the claim of the depreciation pertaining to BMIL and PHL units. The Ld. DR, on the other hand, fairly accepted that the issue is squarely covered in favour of the assessee by the decision of Tribunal for earlier years. But, he strongly supported order of the Ld. AO, as well as the Ld. DRP. 19. We have head both the parties, perused the material available on record and gone through orders of the authorities below. We find that this issue was subject matter of deliberations by the co-ordinate bench of ITAT, Mumbai 'J' bench in assessee's own case for AY 2009-10, where under identical set of facts, the Tribunal allowed claim of depreciation. The relevant findings of the Tribunal are as under:- 18. Insofar the disallowance of the claim of depreciation pertaining to BMIL is concerned, we find that the same being a recurring issue is covered by the order of the Tribunal in the assesses own case for A.Y. 20....
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....e find that the assessee subsequent to the takeover had taken the WDV on the basis of the Income Tax records of PHL. As is discernible from the orders of the lower authorities and admitted by the assessee in its objections raised before the DRP, though PHL had not claimed depreciation on its assets, however, the A.O. while framing the assessment in its hands for A.Y. 1996-97 had allowed the same. Apart there from, the assessee had during the year relevant to A.Y. 1999-2000 sold its two divisions viz. (i). Glass Division (GGL); and (ii). Bulk Drug Division (BDD) on a slump sale basis. As such, the assessee company in A.Y. 1999-2000 while computing the deprecation had dropped the WDV of the aforesaid two undertakings from the respective "block of assets" on the date of such "slump sale". As observed hereinabove, the A.O. declined to accept the claim of the assessee that it was a "slump sale" transaction and considered the same as an itemised sale of assets. On the basis of his aforesaid observations, the A.O. worked out the WDV of the "block of assets" by taking the values of the assets as were recorded in the "books of accounts" of the purchasing company, as the sale value, and redu....
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....return of income. The Ld. DR, on the other hand strongly supported order of the Ld. AO, as well as the Ld. DRP. 22. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that a similar issue has been considered by the co-ordinate bench for AY 2009-10 and after considering relevant facts has restored the matter back to the file of the Ld. AO to verify the claim of the assessee that impact of grossing up of tax, duty, cess, etc by revaluing the purchases and inventories by inter alia including the effect of CENVAT credit would be nill. The relevant findings of the Tribunal are as under:- 22. We have deliberated at length on the issue under consideration and find that the assessee for the purpose of its statutory accounts had followed the AS-2 on Valuation of Inventories, and the Guidance Note on Accounting Treatment of MODVAT/CENVAT issued by the ICAI. Accordingly, the assessee had followed the exclusive method for accounting purposes. However, for the purposes of income-tax it had worked out the impact of grossing up of tax, duty, cess etc. by restating the values of purchases and inventories by includin....
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....that when, own funds is in excess of investments made in shares and securities, which yield exempt income, then interest expenses cannot be disallowed under Rule 8D(ii) of I.T. Rules, 1962. Insofar as, disallowances of other expenses, only those investments, which yield exempt income can be considered, while computing the average value of investments in order to determine total disallowances required to be made under Rule 8D(2)(iii) of I.T. Rules, 1962. 25. The Ld. AR for the assessee, at the time of hearing submitted that this issue is also covered in favour of the assessee by the decision of ITAT, 'J' bench for AY 2009-10, where the Tribunal under identical set of facts has held that if, assessee is able to prove own funds in excess of investments made in shares and securities, which yield exempt income, then there could not be any disallowances of expenditure, however restored the matter back to the file of the Ld. AO to verify, whether there is sufficient own funds to cover-up the value of investments. Similarly, in respect of disallowances of other expenditures, the Tribunal has held that only those investments, which yield exempt income can be considered, while compu....
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....ound to be in order, then no disallowance of interest expenditure U/rule 8D(2)(ii) could be made. We thus respectfully following the view taken by the Tribunal in the assesses own case for A.Y. 2008-09 in the backdrop of the aforesaid settled position of law, thus direct the A.O. to verify the claim of availability of sufficient interest free funds with the assessee. After verification, if the assesses claim is found to be in order, then the disallowance of the interest expenditure made in its hands u/s. 14A r.w 8D(2)(ii) shall be deleted. 25. As regards the disallowance of administrative expenditure U/rule 8D(2)(iii) of Rs. 524.83 lacs is concerned, we are persuaded to be in agreement with the claim of the ld. A.R that while computing the disallowance only the investments which had yielded exempt income during the year under consideration viz. A.Y. 2009-10 were to be considered for working out the "average value of investments". Our aforesaid view is fortified by the order of the "Special Bench" of the ITAT, Delhi in the case of ACIT Vs. Vireet Investments Pvt. Ltd. (2017) 165 ITD 27 (Del)(SB). In fact, the Tribunal while disposing off the appeal in the assesses own case for the....
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....of the assessee by the decision of ITAT, Mumbai 'J' bench in assessee's own case for AY 2009-10, where under identical set of facts, the Tribunal after considering relevant facts has deleted additions made by the Ld. AO towards disallowances of advertisement and business promotion expenses. 31. The Ld. DR, on the other hand, fairly accepted that the issue is covered in favour of the assessee by the decision of ITAT, Mumbai 'J' bench for AY 2009-10. But, he strongly supported findings of the Ld. AO, as well as the Ld. DRP. 32. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that an identical issue has been considered by the co-ordinate bench of ITAT, in assessee's own case for AY 2009-10 and after considering relevant facts, including facts brought out by the Ld. AO, in light of Medical Council of India Regulations, 2002, and circular of CBDT No. 05/2012, held that the Medical Council Regulations, 2002 has no application to the companies and accordingly, expenditure incurred towards advertisement and business promotion are deductible u/s. 37(1) of the I.T. Act, 1961. The rele....
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....e not applicable in the year under consideration; (iv) that the circular issued by the CBDT cannot impose an obligation adverse to an assessee; and (v) that the samples, expenses incurred on conference etc. by the assessee were not in the nature of freebies. 30. We have deliberated at length on the issue under consideration and find that the issue that the expenses incurred by an assessee which is a pharmaceutical company would not be hit by the Explanation 1 to Sec. 37 of the I.T. Act, is covered by the order of a coordinate bench of the Tribunal i.e ITAT "A" Bench, Mumbai in the case of Aristo Pharmaceuticals Pvt. Ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018).The Tribunal after exhaustive deliberations in the aforesaid case, had observed that a perusal of the provisions of the Indian Medical Council Act, 1956, revealed that the scope and ambit of the statutory provisions relating to professional misconduct of registered medical practitioners under the Indian Medical Council Act, 1956, is restricted only to the persons registered as medical practitioners with the State Medical Council and whose name is entered in the Indian Medical Register maintained under Sec. 21 of ....
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....or allied health sector industry in providing any "freebies" to medical practitioners or their professional associations in violation of the regulation issued by Medical Council of India which is a regulatory body constituted under the Medical Council Act, 1956, would be liable to be disallowed in the hands of such pharmaceutical or allied health sector industry or any other assessee which had provided such "freebies" and claimed the same as a deductible expense against its income in the accounts. 21. We have deliberated at length on the issue under consideration and after perusing the regulations issued by the Medical Council of India, find that the same lays down the code of conduct in respect of the doctors and other medical professionals registered with it, and are not applicable to the pharmaceuticals or allied health sector industries. Rather, a perusal of the provisions of the Indian Medical Council Act, 1956, reveals that the scope and ambit of statutory provisions relating to professional conduct of registered medical practitioners under the Indian Medical Council Act, 1956 is restricted only to the persons registered as medical practitioners with the State Medical Counc....
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....are unable to comprehend that now when the MCI has no jurisdiction upon the pharmaceutical companies, then where could there be an occasion for concluding that the assessee company had violated any regulation issued by MCI. We thus, in terms of our aforesaid observations are of the considered view that even if the assessee had incurred expenditure on distribution of "freebies" to doctors and medical practitioners, the same though may not be in conformity with the Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 (as amended on 10.12.2009), however, as the same only regulates the code of conduct of the medical practitioners/doctors, therefore, in the absence of any prohibition on the pharmaceutical companies in incurring of such sales promotion expenses, the latter cannot be held to have incurred an expenditure for a purpose which is an offence or is prohibited by law. In this regard we are reminded of the maxim "Expressio Unius Est Exclusio Alterius", which provides that if a particular expression in the statute is expressly stated for a particular class of assessee, then by implication what has not been stated or expressed in the statute has to ....
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.... of freebees enjoyed by the aforesaid medical practitioner or professional associations is also taxable as business income or income from other sources as the case may be depending on the facts of each case. The assessing officers of such medical practitioner or professional associations should examine the same and take an appropriate action. This may be brought to the notice of all the officers of the charge for necessary action." We may herein observe that a perusal of the aforesaid CBDT Circular reveals that the "freebies" provided by the pharmaceutical companies or allied health sector industries to medical practitioners or their professional associations in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 shall be inadmissible under Sec. 37(1) of the Income Tax Act, 1961, as the same would be an expense prohibited by the law. We are of the considered view that as observed by us hereinabove, the code of conduct enshrined in the notifications issued by MCI though is to be strictly followed and adhered by medical practitioners/doctors registered with the MCI, however the same cannot impinge on the conduct of ....
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.... the aforesaid issue as regards the period of applicability of the CBDT Circular No. 5/2012, dated 01.08.2012 was also looked into by the ITAT "A" Bench, Mumbai, in the aforementioned case of Aristo Pharmaceuticals Pvt. Ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018), wherein it was observed as under: "25. We thus, in the backdrop of the aforesaid settled position of law as regards the prospective applicability of an oppressive circular, are of the considered view that as the CBDT as per its Circular No. 5/2012 :, dated 01.08.2012 had enlarged the scope of Indian Medical Council Regulation, 2002, and had made the same applicable to the pharmaceutical companies, thus the same cannot be reckoned to have a retrospective effect. We find that a coordinate bench of the Tribunal viz. ITAT, Mumbai in the case of Syncom Formulations (I) Ltd. Vs. DCIT-8(3), Mumbai (ITA No. 6428 & 6429/Mum/2012, dated 23.12.2015) for A.Ys. 2010-11 and 2011-12 had concluded that the aforesaid CBDT Circular No. 5/2012, dated 01.08.2012 would not be applicable to the A.Ys. 2010-11 and 2011-12, as the same was introduced w.e.f. 01.08.2012. We thus, in terms of our aforesaid observations are of the consi....
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....e purpose of giving administrative relief or for clarifying the provisions of law, but the same cannot impose a burden on the assessee, leave alone creating a new burden by enlarging the scope of a regulation issued under a different act so as to impose any kind of hardship or liability on the assessee. We thus, are unable to persuade ourselves to subscribe to the rigours contemplated in the CBDT Circular No. 5/2012 :, dated 01.08.2012, which we would not hesitate to observe, despite absence of anything provided by the MCI in its regulations issued under the Medical Council Act, 1956, contemplating that the regulation of code of conduct would also cover the pharmaceutical companies and healthcare sector, however provides that in case a pharmaceutical or allied health sector industry incurs any expenditure in providing any gift, travel facility, cash, monetary grant or similar freebies to medical practitioners or their professional associations in violation of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, the expenditure incurred on the same shall be disallowed in the hands of such pharmaceutical or allied health sector industry. We are o....
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....lso not known as to who was the beneficiary of the amount that was given and what was the benefit that was accorded, therefore, the expenses claimed by the assessee cannot be considered as established to have been incurred by it wholly and exclusively in the course of its business. We are unable to persuade ourselves to endorse the aforesaid observations of the A.O. for drawing of adverse inferences as regards the aforesaid expenses incurred by the assessee. As a matter of fact, as is discernible from the assessment order, the A.O. except for directing the assessee to furnish sample bills, had at no stage called upon it to substantiate the same on the basis of any further material. At least, no such exercise carried out by the A.O. can be gathered from the orders of the lower authorities. Apart there from, nothing has been brought to our notice by the ld. D.R in the course of hearing of the appeal which would have persuaded us to have arrived at a different view. Be that as it may, we find that the A.O. even at the time of disallowing 50% of the expenses i.e Rs. 27,90,84,346/-, had observed that the same were being disallowed as majority of the expenses were incurred for giving "fr....
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....ed was in context of the manufacturing activity carried out at the Baddi unit. Apart there from, there is also no clarity on the fact whether the assessee had maintained unit wise accounts and the expenditure claimed is as per the accounts. In nut shell, there is no evidence which would justify attribution and allocation of the interest expenditure and the R&D expenditure to the Baddi unit of the assessee. We find that similar facts were involved as regards allocation of the aforesaid expenses viz. (i). interest expenditure; and (ii). R&D expenses, in the assesses own case for the immediately preceding year i.e A.Y. 2008-09 before the Tribunal viz. M/s. Piramal Enterprises Ltd. Vs. Addl. CIT, Circle-7(1), Mumbai. The Tribunal observing that as the revenue had failed to bring on record any cogent material to establish that the borrowed funds were utilised in setting-up the Baddi unit and further the R&D expenditure incurred was related to manufacturing activity carried out at the Baddi unit, had thus in all fairness restored the issue to the file of the A.O. for fresh adjudication, after affording an opportunity of being heard to the assessee. As the fact situation in context of the....
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....tered Accountant in "Form No. 10CCB" for A.Y. 2007-08, wherein at Col No. 8 the date of commencement of operation activity by the undertaking or enterprise is stated as "June 10, 2006". Further, the assessee in the course of its assessment for A.Y. 2007-08 had vide its letter dated 24.09.2009 (Page 524 of "APB") furnished with the A.O. viz. (i). copy of the certificate of commencement of commercial production issued by the Government of Himachal Pradesh, Department of Industries (Annexure 35 of the reply). Apart there from, the assessee had also vide its aforesaid letter submitted before the A.O. that it had set-up a new manufacturing undertaking at Baddi in the State of Himachal Pradesh, which had begun production of pharmaceutical products during the period relevant to A.Y. 2007-08. Further, the complete details of the 87 pharmaceutical products viz. their product description alongwith their product codes was also placed on the record of the A.O. (Page 526 of "APB"). Also, the complete details of the additions to the Plant & Machinery of a value of Rs. 83,32,03,012/- that was made by the assessee at its Baddi unit during the F.Y 2006-07 was also filed with the A.O. (Page 529 - 54....
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....ve drawn adverse inferences as regards the eligibility of the assesses towards claim of such deduction during the year under the consideration viz. A.Y. 2009-10 i.e the 3rd year of its operation, on the ground that the assessee had violated the conditions of constitution/formation as envisaged in Sec. 80IC(4). Be that as it may, as the satisfaction of the conditions prescribed in Sec. 80IC(4) is required to be looked into in the year of "formation", therefore, we are persuaded to subscribe to the contentions advanced by the ld. A.R that no adverse inferences as regards the eligibility of the claim of deduction for the alleged non-satisfaction of the conditions therein provided could have been validly drawn in the hands of the assessee while framing its assessment for the year under consideration viz. A.Y. 2009-10 i.e the 3rd year of operation. 39. In this view of the matter and consistent with view taken by the co-ordinate bench, we are of the considered view that the Ld. AO was erred in disallowed deduction claimed u/s. 80IC of the I.T. Act, 1961, on examination of eligibility criteria for claiming said deduction without appreciating the fact that eligibility criteria for claimin....
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.... case of Tata Autocomp Systems Ltd. (supra), the Hon'ble Jurisdictional High Court held that when the AE is situated in Germany, rate of interest on the loan advanced to the AE has to be determined on the basis of rate of interest prevailing in Germany where the loan has been consumed. The Hon'ble Delhi High Court in Cotton Naturals (I) Pvt. Ltd. (supra) has also expressed similar view. The other decisions relied upon by the learned Sr. Counsel are also in the same line. Keeping in view the ratio laid down in the aforesaid decisions, we do not find any infirmity in the order of the learned Commissioner (Appeals). Accordingly, we uphold the same by dismissing the ground raised by the Revenue. 42. In this view of the matter and consistent with view taken by the co-ordinate bench, we direct the Ld. AO to delete additions made towards TP adjustment on account of interest on loan given to AE's amounting to Rs. 5,01,48,284/-. 43. The next issue that came up for our consideration from ground No. 12 of assessee appeal is TP adjustment on account of corporate guarantee commission amounting to Rs. 19,15,10,985/-. The Ld. AR for the assessee submitted that this issue is also cov....
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.... ITA No. 1832/Mum/2015: 47. The revenue has raised the following grounds of appeal: 1. "On the/acts and circumstances of the case and in taw, the Hon'ble DRP erred in directing the AO to allow the claim of deduction of Rs. 2,42,85,714/- u/s. 35A, relating to amortization of expenses on account of trademarks. 2. On the facts and circumstances of the case and in law, the Hon'ble DRP erred in directing the AO to allow the claim o/deduction of Rs. 2,42,85,714/- u/s. 35A, relating to amortization to expenses on account of trademarks, failing to appreciate that Section 35A is applicable to Patents and Copyrights and not to Trademarks and these concepts are totally different and operate in separate domains. 3. On the facts and circumstances of the case and in law, the while directing as above, the Hon'ble DRP erred in relying on the order dated 15.05.2007 of the ITAT in assessee's own case for A.Ys. 1999-2000, 2000-01 and 2001-02, whereas subsequent to the above order, the Hon'ble Bombay High Court, vide order dated 14.09.2011, kept the question of law relating to applicability of Section 35A of the Income Tax Act 1961, to Trademarks, open to be decided in an a....
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.... it was noticed by the Tribunal that as was discernible from the order of the Hon'ble High Court of Bombay while deciding the Revenue's appeal on the said issue in the case of "SPPL" for A.Y. 1998-99, the Tribunal had allowed the appeal of the assessee on the said issue on two grounds viz. (i). that as trade mark is not alien to patent right as there is a direct link between patent right and trade mark, thus the assessee was eligible to claim deduction u/s. 35A; and (ii). Alternatively, that if the claim of deduction u/s. 35A was not allowable, still the deduction has to be allowed u/s. 37 of the I-T Act in view of the judgment of the Hon'ble Apex Court in Alembic Chemicals Works Co. Ltd. Vs. CIT (1988) 177 ITR 377 (SC). It was observed by the Tribunal that the revenue in its aforesaid appeal before the Hon'ble Jurisdictional High Court in the case of "SPPL" for A.Y. 1998-99, being conscious of the fact that if it succeeded on the ground of entitlement of the assessee towards deduction u/s. 35A on the trade marks, then the deduction of the entire expenditure of Rs. 34 crore in terms of the observations of the tribunal had to be allowed in one go u/s. 37 of the I-T A....