TaxTMI 
TaxTMI 
2020 (7) TMI 568
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.... from the assessment framed by the A.O under Sec.143(3) r.w.s 147, dated 20.12.2017. The assessee has assailed the impugned order on the following grounds of appeal before us: "GROUND NO. 1 RE-OPENING ASSESSMENT U/S. 147 i. 'Subject matter of original assessment proceedings' a. The learned CIT(A) erred in not treating the re-assessment proceedings as invalid, although during the original assessment proceedings, detailed documents were furnished to substantiate the 'Sales Promotion expenses', which only after examining all the facts and explanations and application of mind did the AO disallow Rs. 5.37 crores as expenses related to Doctor's Gifts/Expenses. b. The learned CIT(A) failed to take into consideration that the re-opening proceedings was nothing but a change of opinion. c. The learned CIT(A) erred in holding that the information provided during the original assessment proceedings was not complete in terms of its nature, however the same was not substantiated with any evidence. d. The learned CIT(A) failed to take into consideration that the AO himself in his reasons for reopening has stated in Para 2 : "On p....
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....the CBDT Circular No. 5 of 2012, although the same was with effect from 01-08-2012 and therefore prospective in nature and does not apply to AY. 2012-13. iii. The learned CIT(A) erred in relying on the guidelines laid down in the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations. The Appellant craves leave to add, alter or amend the Grounds of Appeal at or before the hearing of the appeal." 2. Briefly stated, the assessee company which is engaged in the business of manufacturing and trading of pharmaceutical products had filed its return of income for A.Y. 2012-13 on 27.09.2012, declaring its total income at Rs. 29,29,14,990/-. Original assessment in the case of the assessee was framed by the A.O, vide his order passed under Sec.143(3), dated 27.03.2015, and the income of the assessee was assessed at Rs. 49,23,59,750/-. Subsequently, the case of the assessee was reopened under Sec.147 of the Act. In compliance to the notice issued under Sec.148 of the Act, the assessee filed its return of income on 20.04.2017, declaring a total income of Rs. 29,29,14,990/-. 3. In the course of the assessment proceedings the assessee was supplied....
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.... could thus safely be concluded that the assessee after accepting the said order had participated in the re-assessment proceedings. Apart from that, it was observed by the CIT(A), that the reason for reopening the case of the assessee was backed by the fact that a similar disallowance was made in its case for the immediately succeeding year i.e A.Y. 2013-14. It was observed by the CIT(A), that an information culled out from the succeeding year could validly form a basis for reopening the case of an assessee for the preceding year. In support of his aforesaid observations the CIT(A) had relied on the judgments of the Hon"ble High Court of Bombay in the case of (i) Debhashu Services Pvt. Ltd Vs. DCIT (2014) 270 CTR 0036 (Bom); and (ii) Export Credit Guarantee Corporation of India Ltd Vs. Addl. CIT (2013) 350 ITR 651 (Bom). As regards the contentions that were advanced by the assessee to impress upon the CIT(A) that the sales promotion expenses aggregating to Rs. 6,25,53,800/- were rightly claimed as an allowable deduction under Sec.37(1) of the Act, the same did not find favour with him. Observing, that the expenses incurred by the assessee towards providing gifts, travelling facilit....
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....he ld. A.R took us through Page 5 - Para 4 of the assessment order, which revealed that the A.O in the course of the assessment proceedings had called for the requisite details in respect of the Sales Promotion Expenses that were booked by the assessee during the year under consideration. It was pointed out by the ld. A.R, that the A.O while framing the assessment, had after considering the amendment carried out by MCI on 14.12.2009 in its Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002, which regulated the code of conduct of doctors and their professional associations as regards their relationship with pharmaceutical industries and allied health sector industry, and also the CBDT Circular No. 5, dated 01.08.2012, which debarred the pharmaceutical companies to claim deduction u/s 37(1) for expenses incurred on providing freebies to doctors, had disallowed the assessee"s claim for expenses insofar the same related to the gifts given to the doctors to the tune of Rs. 5,37,46,137/-. In sum and substance, it was the claim of the ld. A.R, that the A.O in the course of the regular assessment had arrived at a conscious view that in lieu of CBDT Circu....
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.....37(1) of the Act. In sum and substance, it was the claim of the ld. D.R that as the A.O while framing the assessment had ignored the relevant material, therefore, the case was reopened in order to bring to tax the income of the assessee which had escaped assessment. In support of his aforesaid contentions the ld. D.R relied on the judgment of the Hon"ble High Court of Bombay in the case of Export Credit Guarantee Corporation of India Ltd. Vs. Addl. CIT (2013) 350 ITR 651 (Bom) and the judgment of the Hon"ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC). On merits, reliance was placed by the ld. D.R on the order of the ITAT, Chennai bench "C" in the case of TTK Healthcare Limited Vs. DCIT, Corporate Circle-3(1), Chennai (2017) 78 Taxman.com 86 (Chennai) and ITAT, Mumbai Bench "A" in the case of ACIT, Circle 6(3), Mumbai Vs. Liva Healthcare Ltd. (2016) 161 ITD 63 (Mum). In the backdrop of his aforesaid submissions, it was the claim of the ld. D.R that as the A.O had validly assumed jurisdiction u/s 147 of the Act, therefore, the claim of the counsel for the assessee did not merit acceptance and was liable to be rejected. 8. R....
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....id issue, it would be relevant to cull out the "reasons to believe" on the basis of which the case of the assessee was reopened by the A.O, which reads as under : " The assessee company electronically filed its return of income for A.Y 2012-13 on 27.09.2012 declaring total income of Rs. 29,29,14,990/-. The assessment u/s 143(3) was made on 27.03.2015 at a total income of Rs. 49,23,59,750/-. On a perusal of the details of sales promotion expenses of Rs. 15,91,18,528/- filed by the assessee, assessee incurred expenses of Rs. 2,80,57,032/- and Rs. 2,28,38,324/- on conference and travelling respectively. As per the further breakup of these expenses, out of the aforementioned expenses, Rs. 1,52,56,668/- and Rs. 1,18,47,054/- on conference and travelling respectively were not incurred for the assessee company but for others, which in its all likelihood were spent towards doctors only. It is further noticed that a sum of Rs. 1,09,91,271/- was incurred by the assessee on account of doctors expenses. The assessee also claimed expenses of Rs. 2,44,58,807/- towards product reminder. These expenses are nothing but amount spent towards various items of gifts (or other items) w....
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..... 5/2012 issued on 01.08.2012 was challenged by Confederation of Indian Pharmaceutical Industry before Hon"ble High Court of Himachal Pradesh in the case of Confederation of Indian Pharmaceutical Industry Vs. CBDT & Another (CWP No. 10793 of 2013), wherein the High Court in its order dated 26-12-2012 upheld the validity & legality of the Circular stating that what is stated by Explanation to Section 37(1) is what is intended by the Circular and also that IMC Regulation is a very salutary regulation which is in the interest of the patients and the public. In view of the above, conference & travelling expenses incurred by the assessee for others of Rs. 1,52,56,668/- and Rs. 1,18,47,054/- respectively, doctors expenses of Rs. 1,09,91,271/- and expenses of Rs. 2,44,58,807/- incurred towards product reminder need to be disallowed and therefore, I have a reason to believe that the amount of Rs. 6,25,53,800/- chargeable to tax has escaped assessment for A.Y 2012-13 within the meaning of clause (c) of Explanation 2 of section 1487 of the Income-tax Act, 1961. In view of the above reasons, notice u/s 148 of the Income-tax Act, 1961 for the A.Y 2012-13 is issued. The notice....
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.... hereinabove, the complete bifurcated details of the sales promotion expenses were filed by the assessee in the course of the original assessment proceedings, and the A.O after perusing the same in the backdrop of the Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002 (as amended by the MCI on 14.12.2009), and also the CBDT Circular No. 5, dated 01.08.2012, had consciously chosen to restrict the disallowance only to the extent the same pertained to such expenses which were incurred by the assessee on giving gifts to doctors. In other words, the A.O after considering the Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002 (as amended by the MCI on 14.12.2009), and also the CBDT Circular No. 5, dated 01.08.2012, had formed an opinion, that out of the sale promotion expenses only the expenses which were incurred by the assessee for giving gifts to doctors were liable to be disallowed u/s 37(1) of the Act. 12. We have further perused the "reasons to believe" and find substantial force in the contention of the ld. A.R, that the entire exercise for reopening the concluded assessment of the assessee was embarked upo....
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....ted 27.03.2015. As observed by us hereinabove, a careful perusal of the reasons recorded by the A.O, reveals beyond doubt, that the A.O in the garb of reopening the case of the assessee, had on the basis of the same set of facts as were available on record and had been deliberated upon by his predecessor at the time of framing of the original assessment, tried to substitute his view, as against that which was arrived at by his predecessor. In fact, we are unable to comprehend as to what new "material" or "information" had came up before the A.O, which would have justified the reopening of the concluded assessment of the assessee. We would not hesitate to observe, that the A.O holding a conviction that his predecessor while framing the regular assessment was in error in not disallowing the impugned sale promotion expenses, which as per him were not allowable as per "Explanation" to Sec. 37(1) of the Act, had thus, with the sole objective of substituting his view as against that of his predecessor, had therein sought to disallow the same by reopening the case of the assessee. We are afraid that such a substitution of a view of a successor A.O cannot form a justifiable basis for reope....
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....AO. We quote hereinbelow the relevant portion of Circular No. 549, dt. 31st Oct., 1989 [(1990) 82 CTR (St) 1], which reads as follows : "7.2 Amendment made by the Amending Act, 1989, to re-introduce the expression "reason to believe" in s. 147.-A number of representations were received against the omission of the words "reason to believe" from s. 147 and their substitution by the "opinion" of the AO. It was pointed out that the meaning of the expression, "reason to believe" had been explained in a number of Court rulings in the past and was well settled and its omission from s. 147 would give arbitrary powers to the AO to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended s. 147 to reintroduce the expression "has reason to believe" in place of the words "for reasons to be recorded by him in writing, is of the opinion". Other provisions of the new s. 147, however, remain the same." Further, following the judgment of the "Full bench" of the Hon"ble High Court of Delhi in the case of Kelvinator of India (supra), which had been upheld by the Hon"ble Apex Court, the Hon'ble High Court of Bombay in the case of As....
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....he AO has used the phrase "reason to believe", admittedly between the date of the order of assessment sought to be reopened and the date of formation of opinion by the AO, nothing new has happened, therefore, no new material has come on record, no new information has been received; it is merely a fresh application of mind by the same AO to the same set of facts and the reason that has been given is that the some material which was available on record while assessment order was made was inadvertently excluded from consideration. This will, in our opinion, amount to opening of the assessment merely because there is change of opinion. The Full Bench of the Delhi High Court in its judgment in the case of Kelvinator (supra) referred to above, has taken a clear view that reopening of assessment under s. 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for respondent No. 1 to issue notice under s. 148". Further, the Hon'ble High Court of Bombay in the case of ICICI Prudential Life Insurance Co. Ltd. Vs. ACIT (2010) 325 ITR 471 (Bom), relying on the judgment of the Hon"ble Supreme Court in the ....
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....rence to the same basis, namely the existence of a nil surplus/deficit in Form 1 which was drawn to the attention of and was present to the mind of the AO during the assessment proceedings under s. 143(3). Consequently, it is evident that there is an absence of tangible material before the AO". Also, the Hon"ble High Court of jurisdiction in the case of Aventis Pharma Ltd. Vs. Asst. CIT (2010) 323 ITR 570 (Bom), reiterating its aforesaid view that reassessment proceedings cannot be permitted on the basis of a "Change of opinion", had held as under:- "There is merit in the submission which has been urged on behalf of the assessee that there was no tangible material before the AO on the basis of which the assessment could have been reopened and what is sought to be done is to propose a reassessment on the basis of a mere change of opinion. This, in view of the settled position of law is impermissible. No tangible material is shown on the basis of which the assessment is sought to be reopened. In the absence of tangible material, what the AO has done while reopening the assessment is only to change the opinion which was formed earlier on the allowability of the de....
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....08.2012 only the expenses incurred by the assessee for giving gifts to doctors of Rs. 5,37,46,137/- were liable to disallowed u/s 37(1) of the Act. As such, we are of the considered view, that unlike the facts involved in the aforesaid case before the Hon"ble High Court, the A.O in the case before us, had in the course of the regular assessment proceedings deliberated upon the assessee"s claim for deduction of sales promotion expenses, and had pursuant thereto concluded that only part of such expenses were liable to be disallowed. In the back drop of our aforesaid observations, we hold a conviction that as the case of the assessee before us is factually distinguishable as in comparison to the case before the Hon"ble High court, support drawn by the ld. D.R from the same would not assist its case. (ii). ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC) (a). In the aforesaid case, the Hon"ble Apex Court had observed, that the scope and effect of s. 147 as substituted with effect from 1st April, 1989, as also ss. 148 to 152 was substantially different from the provisions as they stood prior to such substitution. It was observed, that under the ol....
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....in involved, we are afraid that the reliance placed by the ld. D.R on the aforesaid judicial pronouncement would also not assist his case. On the basis of our aforesaid observations, we are of the considered view that as the reopening in the case before us had been resorted to by the A.O on the basis of a "change of opinion" as regards the allowability of deduction of the sales promotion expenses, on the same set of facts and material as were there before his predecessor who had framed the regular assessment vide his order passed under Sec. 143(3), dated 27.03.2015, the same in light of the aforesaid settled position of law cannot be sustained, and on the said count itself is liable to be vacated. We thus not being able to persuade ourselves to subscribe to the view taken by the CIT(A) as regards the validity of the jurisdiction assumed by the A.O u/s 147 of the Act, set aside his order. Resultantly, the assessment framed by the A.O u/ss. 143(3) r.w.s 147, dated 20.12.2017 is quashed for want of jurisdiction. Ground of appeal No. 1 is allowed in terms of our aforesaid observations. 15. Although, we have set aside the assessment for want of jurisdiction, however, for the sake ....
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....ed 01.08.2012 imposing prohibition on the medical practitioners and their professional associations from taking any gifts, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied healthcare sector industries was applicable prospectively, therefore, the same was not applicable in the case of the assessee for the year under consideration i.e A.Y. 2012-13; and (iii) that the circular issued by CBDT cannot impose an obligation adverse to an assessee. 17. After deliberating at length on the issue under consideration, we find, that the issue that the expenses wholly and exclusively incurred by a pharmaceutical company in the normal course of its business towards gifts, travel facility, conference expenses or similar freebies to medical practitioners or their professional associations would not be hit by the "Explanation 1" to Sec. 37 of the 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). In the aforesaid order, the Tribunal had after exhaustive deliberations observed, that a perusal of the provisions of the In....
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....wability of the sales promotion expenses incurred by the assessee on the distribution of articles to the stockists, distributors, dealers, customers and doctors, in the backdrop of the CBDT Circular No. 5/2012, dated 01.08.2012 and the MCI regulations. We find that it is the case of the revenue that as per the CBDT Circular No. 5/2012, dated 01.08.2012 any expense incurred by a pharmaceutical 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 ....
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....servations, as the Medical Council of India does not have any jurisdiction under law to pass any order or regulation against any hospital, pharmaceutical company or any healthcare sector, then any such regulation issued by it cannot have any prohibitory effect on the manner in which the pharmaceutical company like the assessee conducts its business. On the basis of our aforesaid observations, we 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, t....
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....ofessional Conduct, Etiquette and Ethics) Regulations, 2002 shall be inadmissible under section 37(1) of the Income Tax Act being an expense prohibited by the law. This disallowance shall be made in the hands of such pharmaceutical or allied health sector Industries or other assessee which has provided aforesaid freebees and claimed it as a deductible expense in its accounts against income. 4. It is also clarified that the sum equivalent to value 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 Counci....
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....e." 18. Apart from that, we are also in agreement with the alternative contention advanced by the ld. A.R, that though a benevolent CBDT Circular may apply retrospectively, but then, a circular imposing a burden on an assessee has to apply prospectively only. Resultantly, now when the CBDT Circular No. 5/2012 was issued only as on 01.08.2012, the same would thus not be applicable to the case of the assessee before us i.e for the period relevant to A.Y 2012-13. In fact, the aforesaid issue as regards the prospective applicability of the CBDT Circular No. 5/2012, dated 01.08.2012 was also looked into by the tribunal in the 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. W....
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....gours of law in order to ensure a fair enforcement of the provisions by issuing circulars for clarifying the statutory provisions, however, it is divested of its power to create a new impairment adverse to an assessee or to a class of assessee without any sanction or authority of law. We are of the considered view that the circulars which are issued by the CBDT must confirm to the tax laws and though are meant for the 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 he....
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....ical industry was not gone into. Also, the aspect that the burden imposed by the CBDT vide its aforesaid Circular No. 5/2012, dated 01.08.2012 on the pharmaceutical or allied health sector industries, despite absence of any enabling provision under the Income Tax law or under the Indian Medical Council Regulations, which thus clearly impinges on the conduct of the pharmaceutical and allied health sector industries in carrying out its business, was also not deliberated upon. We thus in terms of our aforesaid observations and respectfully following the view taken by the co-ordinate 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), are of the considered view, that the expenditure of Rs. 6,25,53,800/-incurred by the assessee towards sales promotion expenses viz. (i) conference expenses for doctors:Rs. 1,52,56,668/-;(ii) travelling expenses for doctors: Rs. 1,18,47,054/-;(iii).other expenses related to doctors: Rs. 1,09,91,271/-; and (iv) expenses incurred on product reminders given to doctors: Rs. 2,44,58,807/- would not be hit by the "Explanation" to Sec. 37 of the Act. Accordingly, on ....
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....ot ion Expense: The CIT (A) has erred in upholding the disallowance of Rs. 5,37,46,137/- made by AO, out of Sales Promotion expenses, as resulting into freebies to the Doctors, as per the circular of CBDT dated 01.08.2012 & Rules made by MCI. The CIT (A) erred to appreciate that the said circular of CBDT was dated 01.08.2012 whereas the expenditure of Sales Promotion were made before 31 March 2012, and hence the said CBDT Circular was not applicable for Asst. Year 2012-13. GROUND No. IV : Not allowing 80IB exemption in respect of disallowed Sales Promotion expenses: Without prejudice to Ground No. III The CIT (A) erred in not giving exemption u/s 80IB in respect of increased Business Profits of eligible Units, due to disallowance of Sale Promotion expenses. The CIT (A) has failed to appreciate that the disallowance of Sales Promotion expenses increased the Business Profit of 80IB eligible Units, and hence the increased Profits were eligible for exemption u/s 80IB. The Appellant craves leave to add, alter, amend or withdraw any grounds of Appeal, as and when so advised." 23. Briefly stated, the assessee company had filed its r....
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....cal reply given by the assessee during the course of assessment proceedings has also been considered in connection with the above. (e) It is important to mention that the pharmaceutical products are life saving products and there cannot be even a minute variation in the composition. (f) The product are made under the latest machine and equipments to achieve the desired specification. (g) The raw material / input of the pharma product are usually very costly and no one will prefer to waste the costly inputs. (h) There is no colour and coating and in the composition of the product which means the colour and coating and also add to the total weight/volume of the formulation, thereby resulting in minor substituting of the main ingredients. (i) Nowhere been in the formulation has this kind of a seriously high variation and consumption are recorded. The lesser product reported by the assessee viz. the consumption of the main ingredients, brings out very clearly that the assessee is not recording the full production of finished goods and he is selling the same outside the books of accounts. Therefore the AR was not able to explain the ....
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....is that was taken by the A.O for computing the wastages claimed in the manufacturing process of various drugs was factually explained and scientifically supported by the documents submitted by the assessee. At the same time, the CIT(A) held a conviction that the wastages had to be within the limits prescribed under the DPCO. Accordingly, the CIT(A) concluded that the wastages exceeding the DPCO norms, as per the details submitted by the assessee were to be held to be unexplained. On the basis of his aforesaid observation, the CIT(A) directed the A.O to work out the suppressed production of the assessee on the basis of the wastages of raw material exceeding those prescribed by the DPCO for each drug. As regards the disallowance of the assessee"s claim for deduction of an amount of Rs. 5,37,46,137/-, that was claimed by the assessee to have been incurred for giving gifts to doctors, the CIT(A) finding no infirmity in the view taken by the A.O confirmed the said disallowance. Before the CIT(A), the assessee had also claimed, that insofar its income was enhanced pursuant to the additions made by the A.O towards suppressed sales, its entitlement towards claim of deduction u/s 80IB would....
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....books of accounts. 26. Per contra, the ld. D.R relied on the order of the lower authorities. 27. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. On a perusal of the order of the CIT(A), we find that he had after exhaustive deliberations found favour with the claim of the assessee that the basis of computation of wastage and the ultimate suppression of production as concluded by the A.O in the assessment order was scientifically unsustainable. The CIT(A) while concluding as hereinabove, had observed as under: "(4) Based on the above discussion and analysis of the assessment order, submission and arguments of the Appellant Company, various remand reports, documentary support filed by the Appellant Company the following conclusion emerges: (i) The AO's basis of computation of excess raw material consumption is based on an absolutely theoretical presumption that the raw material formulation shown on the packing of the particular drug should match with the total consumption of the raw material of the drug. Such presumption has no factual or scientific basis. ....