DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), VADODARA, AAYKAR BHAWAN vs. SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED, SPARC

ITA 931/AHD/2025Status: DisposedITAT Ahmedabad15 October 2026AY 2014-1552 pages
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What were the facts?

This judgment consolidates ten appeals filed by Sun Pharma Advanced Research Co. Ltd. (the Assessee) and the Revenue against various orders of the Commissioner of Income-tax (Appeals) for assessment years spanning from 2009-10 to 2018-19. The appeals involve common issues related to transfer pricing, disallowance of software expenses, and disallowance of research and development expenditure. The Assessee is represented by senior advocates and authorized representatives, while the Revenue is represented by the CIT-DR. The appeals were heard on August 7, 2026, and the order was pronounced on October 15, 2026. The specific amounts in dispute are not consistently detailed across all appeals in the provided text.

What did the Tribunal hold?

The Tribunal dismissed the Revenue's ground concerning the addition of Rs. 4,28,000/- for product development services to AEs, relying on a previous decision in the case of Sun Pharmaceutical Industries Ltd. For other grounds where parties agreed there was no change in circumstances, the Tribunal's decision in ITA No. 931/Ahd/2025 for AY 2014-15 was to apply mutatis mutandis. The Revenue's appeals in ITA Nos. 2593/AHD/2025 (AY 2017-18) and 2594/AHD/2025 (AY 2018-19) were allowed, following the decision in ITA No. 765/AHD/2025 for AY 2012-13. The Assessee's appeals (ITA Nos. 366/AHD/2020, 765/AHD/2025, 766/AHD/2025, 767/AHD/2025, 768/AHD/2025) were partly allowed for statistical purposes. The Revenue's appeals (ITA Nos. 931/AHD/2025, 932/AHD/2025, 933/AHD/2025) were also partly allowed for statistical purposes, with ITA 932/AHD/2025 being allowed for statistical purposes.

What were the issues?

The Tribunal was required to decide several issues, primarily concerning the applicability of transfer pricing provisions to transactions with Sun Pharma Global Inc. ('SPG BVI') and Sun Pharma Global FZE ('SPG FZE'), and whether sections 92A(1) and 92A(2) are independent. The Assessee contended that the Assessing Officer (AO)/Transfer Pricing Officer (TPO) did not provide adequate opportunity to be heard, violating natural justice. The Revenue, in its grounds of appeal for various assessment years, argued that the CIT(A) erred in deleting disallowances related to R&D expenditure under Section 35(1)(iv), asserting that the Assessee did not fulfill the conditions as it was not involved in a business utilizing the developed technology and was engaged in marketing research as a product. The Revenue also challenged the deletion of software expenses, deeming them capital in nature due to enduring benefits. The Assessee argued that the CIT(A) erred in upholding the AO/TPO's findings and in applying transfer pricing provisions.

Which sections of the Income-tax Act were involved?

Section 35(1)(iv),Section 37,Section 92A(1),Section 92A(2)

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Heard together (2 matters)

ITA 366/AHD/2020
ITA 2593/AHD/2025

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपील"य अ"धकरण, अहमदाबाद पीठ", अहमदाबाद INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCHES, AHMEDABAD BENCH: D

BEFORE DR. BRR KUMAR, VICE PRESIDENT AND SHRI SANJAY KUMAR, JUDICIAL MEMBER

1.

ITA 366/AHD/2020 (िनधा"रण वष"/Assessment Year: 2009-10) Sun Pharma Advance Research The DCIT, Circle-2(1)(1) Co. Ltd 4th Flor, Aayakar Bhavan Sparc, Akota Road, Akota, Vs. Vadodara-390007, GUJARAT Vadodara-390020, Gujarat अपीलाथ" Appellant ""थ" Respondent

PAN of Assessee: AAJCS8340R

अपीलाथ" "ारा/Appellant represented by: Shri S N Soparkar, Sr Advocate & MS Urvashi Sodhan, ARs ""थ" "ारा/Respondent represented by: Shri R.V.Aroon Prasaad,CIT-DR

2.

ITA 2593/AHD/2025 (िनधा"रण वष"/Assessment Year: 2017-18) Deputy Commissioner Of Income Sun Pharma Advanced Tax, Circle-2(1)(1), Vadodara Research Company Limited Aayakar Bhavan, Race Course Plot No. 5 And 6/1,Savli Gidc Vs. Circle, Vadodara, Vadodara- Estatemanjusar,Vadodara 390007, Gujarat Vadodara-391775, Gujarat अपीलाथ" Appellant ""थ" Respondent

PAN of Assessee: AAJCS8340R

अपीलाथ" "ारा/Appellant represented by: Shri R.V.Aroon Prasaad,CIT-DR ""थ" "ारा/Respondent represented by: Shri S N Soparkar, Sr Advocate & MS Urvashi Sodhan, ARs

3.

ITA 2594/

The order continues below.

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