DOSCH PHARMACEUTUCALS PVT LTD,MUMBAI vs. DY. COMMISSIONER OF INCOME TAX CIRCLE 1(3)(1), MUMBAI

ITA 2088/MUM/2026Status: DisposedITAT Mumbai07 August 2026AY 2014-155 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 37(1) is not applicable for computing capital gains under Section 50B, as Section 37(1) pertains to the computation of business income. The addition was unjustified as the assessee did not claim any business income or such expenses.

What were the facts?

The assessee sold its Animal Health Division via slump sale and offered capital gains under Section 50B. The AO made an addition for a difference in escrow account amounts, treating it as disallowable expenditure under Section 37(1). The CIT(A) confirmed this addition.

What were the issues?

Whether Section 37(1) can be applied to disallow expenditure when income is assessed under Section 50B as capital gains, and whether the CIT(A) erred by not adjudicating this legal ground.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 50B,Section 29

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL“A” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER (Physicalhearing) Dosch Pharmaceuticals Pvt. Ltd. DCIT, Circle – 1(3)(1), Mumbai 15-C, Laxmi Industrial Estate, New vs Room No. 540, 5th Floor, Aayakar Link Road, Andheri West, Bhavan, M.K. Road, Mumbai – 400053. Mumbai – 400020. [PAN: AAACD2320F] Appellant / Assessee Respondent / Revenue Assessee by Shri Jose Pulekkoden, Advocate, Ms. Nidhi N. Jain, Advocate & Noor Jahan Sheikh Revenue by Shri Surendra Mohan,Sr. DR. Date of hearing 13.05.2026 Date of pronouncement 07.08.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER;

1.

This appeal by assessee is directed against the order of ld. CIT(A)dated 31.12.2025 for Assessment Year (AY) 2014-15. The assessee has raised following grounds of appeal:

“1. On facts and in law, the learned CIT(A) erred in confirming 1 the addition of Rs. 14,26,898 made by the Assessing Officer under section 37(1) of the Income Tax Act, 1961. 2. The learned CIT(A) failed to appreciate that the impugned amount pertains to slump sale consideration offered to tax under 2 section 50B under the he

The order continues below.

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