TaxTMI 
TaxTMI 
2024 (10) TMI 470
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....elating to on 25.07.2014 in ITA No.6471/M/2010 and 6299/M/2010, wherein certain issues were restored to the file of the assessing officer. Accordingly, the AO passed the order dated 31.3.2016 in order to give effect to the order passed by the ITAT (referred above). The assessee challenged the order so passed by the AO by filing appeal before Ld CIT(A), but the same came to be dismissed by him. Aggrieved, the assessee has filed this appeal. 2. The assessee is a pharmaceutical company engaged in the business of manufacture and sale of bulk drugs and other pharmaceutical products. 3. The first issue relates to the addition of Rs. 38,80,657/- pertaining to alleged bogus purchases. In the first round, the Tribunal had restored this issue a....
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....On the contrary, the supplier M/s Globe Pharma had confessed before Government authorities that it has not supplied the materials, but provided only accommodation bills. But before the AO it has changed the stand and stated that the materials were actually supplied. Further, it has also furnished documents to show that those goods were actually imported by him. But the fact would remain that above said supplier M/s Globe Pharma has changed its stand before the AO. When the above said party changes its stand before different authorities, it may not be possible to ascertain which of his statement was right and hence, it would be difficult to rely upon his changed stand. We noticed that the assessing officer had placed reliance on certain inve....
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....R did not approve following expenses:- Clinical Trial expenses - 2134.72 lakhs Building Repairs - 109.50 lakhs Foreign consultancy exp. - 798.95 lakhs R & D Exhibit Batches - 453.35 lakhs Salary of CMD (30% estimated) 238.45 lakhs 3734.97 lakhs Or 37.35 crores We noticed earlier that the AO had disallowed claim of Rs. 35.56 crores. The weighted deduction u/s 35(2AB) is allowable at two times/1.5 of the expenditure incurred on R & D. Since the disallowance was Rs. 35.56 crores, the corresponding expenditure should be Rs. 17.78 crores, if deduction was allowable at 200% or Rs. 23.70 crores, if the deduction was allowable at 150%. However, the assessee has given b....
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.... deduction. Accordingly, we hold that the building repairs expenses incurred on the premises relating to R & D activity is eligible for weighted deduction. 4.5 The next item of expenses is Foreign Consultancy expenses of Rs. 798.95 lakhs. In the case of USV Ltd (supra), the expenditure incurred on consultancy charges, patent filing charges in foreign countries is held to be eligible for weighted deduction u/s 35(2AB) of the Act. However, the primary requirement is that it is necessary for the assessee to show that those expenses are related to the R & D activity carried on by it. In the instant case, the assessee has paid foreign consultancy charges to the following persons:- A.A. Thornton & Co. - 699.85 lakhs Michael Best & ....
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....ordingly, as per the ratio laid down by Hon'ble Gujarat High Court in the case of Cadila Healthcare Limited (supra), this expenses are also eligible for weighted deduction u/s 35(2AB) of the Act. 4.7 The next item of expenses is the salary of CMD & Chairman allocated to R & D activity. The Ld A.R did not advance his argument on this item of expenditure. Accordingly, we reject this claim of the assessee. 4.8 As noticed earlier, there is difference in the quantum of expenses disallowed by the AO and the details furnished by the assessee. It requires reconciliation. Further, the nature and relationship of foreign consultancy charges are also require examination. Accordingly, we restore this issue to the file of the AO for examining it af....
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.... by jurisdictional Hon'ble Bombay High Court in the case of HDFC Bank Ltd (supra), the presumption is that the investments have been made out of own funds and accordingly, no disallowance out of interest expenses is called for. Accordingly, we direct the AO to delete the interest disallowance of Rs. 23,26,505/-. 6.2 With regard to expenditure disallowance made u/r 8D(2)(iii) of I T Rules, the Ld A.R submitted that the assessee had worked out the expenditure attributable to exempt dividend income at Rs. 10,48,529/-. However, the AO did not examine the same having regard to the books of accounts and hence the AO could not have applied Rule 8D of I T Rules. The present assessment is set aside proceedings and the assessee had only requested ....