DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs. MYLAN LABORATORIES LIMITED (BEING THE AMALGAMATED COMPANY OF ASTRIX LABORATORIES LIMITED), HYDERABAD

PDF · subscribers
ITA 1666/HYD/2017Status: DisposedITAT Hyderabad15 March 2018AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) by respectfully following the decision of a Co-ordinate Bench that had allowed similar depreciation claims in previous assessment years. The AO's disallowance was considered incorrect as it was based on the pendency of the issue.

What were the facts?

The assessee claimed depreciation on technical know-how and drug master files, which was disallowed by the Assessing Officer (AO). The AO's disallowance was based on a consistent stand taken in previous years and the fact that the issue had not reached finality.

What were the issues?

Whether depreciation on technical know-how and drug master files is allowable. Whether the AO can disallow a claim solely because the issue is pending before higher authorities.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 92CA,Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

PER S. RIFAUR RAHMAN, A.M. :

This is an appeal by Revenue against the order of the Commissioner of Income Tax (Appeals)-4, Hyderabad, dated 28-07-2017, for the AY. 2012-13.

2.

Brief facts of the case are that assessee, Astrix Laboratories Limited (now merged with Mylan Laboratories Ltd w.e.f. 01-04-2014) was engaged in the business of manufacture of Pharmaceutical Products. For the AY. 2012-13, in relation to

ITA No. 1666/Hyd/2017 :- 2 -:

the previous year ended 31st March 2012, the assessee filed its return of income on 30-11-2012 declaring total income at Rs. 28,95,25,656/- under normal provisions of the Income Tax Act [Act] and Book Profit of Rs. 28,51,36,536/- u/s.115JB of the Act. The said return was processed u/s.143(1) of the Act. Thereafter, the case was selected for scrutiny and notices u/s. 143(2) & 142(1) of the Act were issued.

3.

Since the assessee transacted with Associated Enterprises (AE) as defined in Section 92A of the Act, the case was referred to Transfer Pricing Officer (TPO), who issued Transfer Pricing Order dated 30-01-2016 by making a NIL adjustment u/s. 92CA of the Act. The AO framed assessment order u/s 143(3) r.w.s. 92CA(3) of the Act dated 24-03-2016 (received by the assessee on 31-03-2016) taking into account the above Transfer Pricing Order. The AO vide his order determined the total income at Rs. 34,41,99,459/- under normal computation and at Rs. 28,51,36,536/- u/s. 115JB. The AO worked out the assessable income at Rs. 34,41,99,459/- and Income tax including surcharge & education cess at Rs 11,16,75,515/- and after adjusting taxes already paid and levying interests u/s. 234B & 234C the net tax demand was worked out to Rs. 2,69,68,087/-.

4.

Aggrieved by the said order, assessee preferred an appeal u/s. 246A of the Act before the Ld.CIT(A). Basing on the facts of the case, Ld.CIT(A) partly allowed the appeal. Aggrieved by the order of Ld.CIT(A), Revenue is in appeal before us with the following grounds:

ITA No. 1666/Hyd/2017 :- 3 -:

“1. The CIT(A) erred in deleting the disallowance of depreciation of Rs. 5,46,73,799/- on technical know-how and drug master files. 2. The CIT(A) erred in ignoring the fact that Revenue’s appeal on identical issue in assessee’s own case for AY. 2009-10 is pending before Hon'ble High Court”. Ground No. 3 is general in nature.

5.

Considered the rival contentions and material on record. It is a fact that AO has disallowed the depreciation of Rs. 5,46,73,799/- claimed by assessee on intangible assets involving technical know-how and Drug Master Files (DMF). Assessee was claiming the depreciation over the years and consistently AO has disallowed the depreciation for AY. 2006- 07. Even during this assessment year, the same stand was followed. However, we noticed that the Co-ordinate Bench has allowed the claim of the assessee in the previous assessment years. AO has disallowed the depreciation during the A.Y. before us merely because it has not reached finality. By respectfully following the decision of the Co-ordinate Bench, we are inclined to uphold the order of CIT(A). Therefore, appeal of the Revenue is dismissed.

Order pronounced in the open court on 16th March, 2018

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 16th March, 2018 TNMM

ITA No. 1666/Hyd/2017 :- 4 -:

Copy to :

1.

The Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad.

2.

M/s. Mylan Laboratories Limited (Being the amalgamated company of Astrix Laboratories Limited), Plot No. 564/A/22, Road No. 92, Jubilee Hills, Hyderabad.

3.

CIT(Appeals)-4, Hyderabad.

4.

Pr.CIT-4, Hyderabad.

5.

D.R. ITAT, Hyderabad.

6.

Guard File.

More judgments on Section 92CA

All 3,978 judgments and leading authorities on Section 92CA →

Recent GST High Court judgments

Search GST case law →