PRINCIPAL COMMISSIONER OF INCOME TAX-1, vs. CADILA PHARMACEUTICALS LTD.,

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TAXAP/201/2018HC GujaratGJHC24011201201804 April 2018Bench: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court decided the appeal based on its previous pronouncements. Regarding question [A], the Court noted that a similar question was considered and rejected in Tax Appeal No. 40 of 2015 by an order dated January 23, 2015. For question [B], the Court referred to Tax Appeal No. 39 of 2015, where a similar issue was considered and the question was rejected by an order dated January 23, 2015. Similarly, for question [C], the Court found that a similar issue had been considered in Tax Appeal No. 39 of 2015 and the question was rejected by an order dated January 23, 2015. Question [D] was considered to be in the nature of a contention supporting question [C]. Based on these prior decisions, the High Court dismissed the Tax Appeal.

What were the facts?

The Revenue, Principal Commissioner of Income Tax-1, filed an appeal before the High Court of Gujarat against an order of the Income Tax Appellate Tribunal (ITAT) dated September 11, 2017. The appeal concerned assessment year(s) not explicitly stated in the judgment. The ITAT had deleted certain additions made by the Assessing Officer. The disputed amounts involved were Rs. 3,65,93,107/-, Rs. 1,68,88,558/-, and Rs. 1,94,85,000/-. The assessee is Cadila Pharmaceuticals Ltd. The High Court granted leave to amend the appeal.

What were the issues?

The Tribunal had to decide on the following questions of law raised by the Revenue: 1. Whether the Tribunal erred in deleting the addition of Rs. 3,65,93,107/- on account of disallowance of expense being capital in nature, as per Section 37 of the Income Tax Act, 1961 (implied by the nature of the disallowance). 2. Whether the Tribunal erred in deleting the addition of Rs. 1,68,88,558/- made under Section 36(1)(iii) of the Act. 3. Whether the Tribunal erred in deleting the addition of Rs. 1,94,85,000/- on account of disallowance under Section 35(2AB) of the Act. 4. Whether the Tribunal erred in ignoring discrepancies in reconciliation figures submitted by the assessee and erroneously concluding that the Revenue had accepted the assessee's claim. Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the Tribunal erred on all four counts. For question [D], the Revenue contended that the Tribunal ignored discrepancies in reconciliation figures and wrongly concluded that the Revenue had accepted the assessee's claim, which was in support of question [C].

Which sections of the Income-tax Act were involved?

Section 36(1)(iii),Section 35(2AB),Section 37

AI-generated summary — verify with the full judgment below

C/TAXAP/201/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 201 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX-1, Versus CADILA PHARMACEUTICALS LTD., ========================================================== Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 MR.S.N.SOPARKAR, LD. SENIOR ADVOCATE with MR B S SOPARKAR(6851) for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 04/04/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Leave to amend. 2. Revenue   has   filed   this   appeal   against   the judgment   of   Income   Tax   Appellate   Tribunal   dated 11.09.2017   raising   following   questions   for   our consideration: “[A] Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of   Rs.3,65,93,107/­   made   on   account   of disallowance   of   expense   being   capital   in nature ? [B] Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of   Rs.1,68,88,558/­   made   u/s   36(1)(iii)   of the Act? [C] Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.1,94,85,000/­   made   on   account   of disallowance u/s 35(2AB) of the Act? Page 1 of 2

C/TAXAP/201/2018 ORDER [D] Whether the Appellate Tribunal has erred in

ignoring

the

discrepancies

in reconciliation   figures   submitted   by   the assessee   and   erroneously   concluding   that Revenue   had   accepted   the   claim   of   the assessee?”

3.

Regarding   question­A,   we   notice   that   similar question came up for consideration before this Court in Tax Appeal No.40 of 2015, question was rejected by an order dated 23.01.2015. 4. Regarding   question­B,   similar   issue   was considered by this Court in Tax Appeal No.39 of 2015 by an order dated 23.01.2015.  Question was rejected. 5. Regarding   question­C   also,   we   notice   that similar issue had come up before this Court in Tax Appeal No.39 of 2015 and vide order dated 23.01.2015, this question was rejected. 6. Question­D  is  mere   in  nature   of  contention   in support of question­C. 7. In the result, Tax Appeal is dismissed. (AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 2 of 2

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