M/s MYLAN LABORATORIES LTD., vs. Commissioner of Income Tax-IV

HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH

PRESENT

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE M.S. RAMACHANDRA RAO

I.T.T.A. NO.496 OF 2014

DATED:30.7.2014

Between:

M/s. Mylan Laboratories Ltd., Having its registered office at Plot No.564/A/22, Jubilee Hills Hyderabad … Appellant

And

Commissioner of Income Tax – IV 3rd Floor, Annexe Building Aayakar Bhawan Basheerbagh Hyderabad … Respondent

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE M.S. RAMACHANDRA RAO

I.T.T.A. NO.496 OF 2014

JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta)

This appeal is directed against the judgment and order of the learned Tribunal, dated 10.1.2014, in relation to assessment year 2008-2009, without suggesting any substantial question of law, but raising the following grounds to make the appeal sustainable. 1. The order of the Income Tax Appellate Tribunal, Hyderabad (ITAT) in the I.T.A. No.66 of 2013 for the Assessment Year 2008- 2009 dated 10-1-2014 is bad in law to the extent of denial of hearing/adjudicating certain objections raised by the appellant covered under the following grounds. 2. The learned ITAT erred in holding that the Appellant is not entitled to deduct Rs.2,17,69,943/- (management fee amounting to Rs.1,12,36,000 & reimbursements for ETP and other charges amounting to Rs.1,05,33,943) from out of its taxable income, being expenditure disallowed in the hands of Astrix Laboratories Limited, a resident JV company under Section 92CA of the Act (Ref: Para 32- page 21 of the ITAT Order). 3. The learned ITAT erred in confirming the disallowance of relief of Rs.26,15,29,315/- under Section 10B based on the order of Commissioner of Income Tax – IV, Hyderabad, under Section 263 for Assessment Year 2005-2006 though the same is before the Hon’ble High Court in Appellant Company’s Writ Petition (against the orders passed by the Commissioner of Income Tax- IV, Hyderabad, under Section 263 of the Act, vide W.P. Nos.2148/2012, 1398/2011 & 2150/2012 for AYs 2004-05, 2005- 06 & 2006-07 respectively. (Ref: Para 37 – Page 23 of the ITAT Order) 4. The learned ITAT erred in not allowing depreciation @25% on the non-compete of Rs.40,00,000/- paid by the Appellant to Mr.

Sudhir Vaid based on the investment agreement with Concord Biotech Limited. 5. The learned ITAT erred in confirming the order of the TPO in reducing the operating profits of the tax-payer by Rs.26,91,30,023/- being the income from settlement of patent infringement suit credited to Profit & Loss account.

We have heard the learned counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal. We are not impressed with the point taken to get the appeal admitted. On the facts and on the aforesaid grounds it is very clear that no element of law is involved at all. It was a transaction between two sister concerns. Therefore, transfer pricing adjustment has been applied based on the facts. Though a connected writ petition is pending, it cannot be a ground to admit the appeal for academic purpose. We do not find any merit in this appeal and the same is accordingly dismissed. There will be no order as to costs.

________________________ K.J. SENGUPTA, CJ

_______________________ M.S. RAMACHANDRA RAO, J 30.7.2014

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