SYNBIOTICS LIMITED vs. ASST. CIT

Facts

The appellant, Synbiotics Limited, is challenging the judgment and order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad 'C' Bench. The appeals concern assessment years 1985-86, 1986-87, and 1987-88. The core of the dispute involves the disallowance of deductions claimed by the assessee for amounts payable to the Drug Prices Equalization Account under the Drugs (Price Control) Order, 1979. The amounts in dispute for these years are Rs. 4,41,46,682/-, Rs. 2,90,34,720/-, and Rs. 13,01,844/-, respectively. The High Court admitted these appeals and framed substantial questions of law.

Held

The High Court held that it should not take a different view from its previous decision in Synbiotics Limited v. Dy. Commissioner of Income Tax and Others (dated 09.04.2009 in Tax Appeal No.380/1999), which dealt with identical facts and questions of law. Consequently, the High Court disposed of the appeals by answering the framed questions in favour of the assessee and against the revenue for all the assessment years under consideration. The reasoning is based on the principle of consistency and adherence to precedent established by the same court. The operative direction is that the appeals stand disposed of with the questions answered in favour of the assessee. No issue was expressly left undecided.

Key Issues

The Tribunal had to decide the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the disallowance of deduction of Rs. 4,41,46,682/- payable to the Drug Prices Equalization Account under the Drugs (Price Control) Order, 1979 (for AY 1985-86)? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the disallowance of deduction of Rs. 2,90,34,720/- payable to the Drug Prices Equalization Account under the Drugs (Price Control) Order, 1979 (for AY 1986-87)? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in confirming the disallowance of deduction of Rs. 13,01,844/- payable to the Drug Prices Equalization Account under the Drugs (Price Control) Order, 1979 (for AY 1987-88)? The revenue contended that the questions raised in these appeals should be answered against the assessee, relying on the High Court's prior decision in Synbiotics Limited v. Dy. Commissioner of Income Tax and Others dated 09.04.2009 in Tax Appeal No.380/1999, where the facts and questions of law were identical. The judgment does not record any specific arguments made by the assessee.