DCIT CIR 7(3)(2), MUMBAI vs. PIRAMAL ENTERPRISES LTD, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “J”, BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER

ITA No.1754/Mum/2015 (Assessment Year: 2010-11) Piramal Enterprise Limited Vs. Addl.CIT, Range-7(3) (formerly known as Piramal Aaykar Bhawan Healthcare Limited) M.K.Road Piramal Tower Mumbai-400 020 Ganpatrao Kadam Marg Lower Parel Mumbai-400 013

PAN/GIR No.AAACN4538P (Appellant) .. (Respondent) & ITA No.1832/Mum/2015 (Assessment Year: 2010-11) DCIT,Circle-7(3)(2) Vs. Piramal Enterprise Limited 622, (formerly known as Piramal Aaykar Bhawan Healthcare Limited) M.K.Road Piramal Tower Mumbai-400 020 Ganpatrao Kadam Marg Lower Parel Mumbai-400 013

PAN/GIR No.AAACN4538P (Appellant) .. (Respondent)

Assessee by Shri J.D.Mistri & Shri Madhur Aggarwal, AR’s Revenue by Shri Shishir Dhamija, DR

Date of Hearing 15/10/2019 Date of Pronouncement 15/01/2020 आदेश आदेश / O R D E R आदेश आदेश PER G.MANJUNATHA (A.M):

2 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

These cross appeals filed by the assessee, as well as the revenue are directed against final assessment order passed by the Ld. AO u/s. 143(3) r.w.s. 144C(13) of the I.T.Act, 1961, in pursuant to directions issued u/s 144C(5) of the I.T.Act, 1961 by the Ld. Dispute Resolution Panel –III, Mumbai, dated 30/12/2014 for the AY 2010-11. Since, the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed-off, by this consolidated order.

ITA.No.1754/Mum/2015:-

GROUND NO- I: DISALLOWANCE OF PAYMENTS MADE TO PIRAMAL CORPORATE SERVICES LTD (FORMERLY KNOWN AS PIRAMAL ENTERPRISES LTD) (PCSL) OF RS.2,03,08,000/- 1. On, the facts and in the circumstances of the case and in law. the AO erred in following the erroneous direction of Dispute Resolution Panel (‘the DRP") in disallowing part of payment made to PCSL of Rs 2,03,08,000/- on the alleged ground that same is not wholly and exclusively for the purpose of business. 2. The Appellant prays that disallowance of payments made to PCSL amounting to Rs.2,03,08,000/- be deleted. GROUND NO. II: DISALLOWANCE OF SOFTWARE EXPENSES AMOUNTING TO RS. 25,01,579/- 1. ON the facts and in circumstances of the case and in law the AO erred in following the erroneous direction of DRP in disallowing software expenses claimed under the head "Repairs - Computer - Others" and "Repairs - Computer - Annual Maintenance" on the alleged jocund that the said expenses are capital in nature and has long temm benefits. 2' The Appellant prays that the AO be directed to treat expenditure incurred on software as revenue expenditure. 3. Without prejudice, the AO is directed to allow depreciation @ 69% on the software expenses incurred.

3 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. ROUND NO. Ill: DISALLOWANCE OF DEDUCTION UNDER SECTION 35(2AB) OF THE ACT IN RESPECT OF ENNORE UNIT AND GOREGAON UNIT AMOUTNING TO RS. 15,26,91 ,093/- On the facts and circumstances of the case and in law. the AO erred in following the erroneous direction of DRP in disallowing the weighted deduction claimed u/s, 35(2AB) in respect of R& D expenses (Revenue and Capital) related to Ennore Unit and Goregaon Unit amounting to Rs.15,26,91,093/- on the alleged ground that no approval is granted by appropriate authority for these units in Form 3CM, 2. The AO failed to appreciate and ought to have held that approval granted by DSIR (Department of Scientific and Industrial Research) is sufficient for claiming deduction u/s 35(2 AB) of the Act, 3. The Appellant prays that the AO be directed to allow weighted deduction as claimed u/s 35(2AB)of the Act. GROUND NO. IV: DISALLOWANCE OF THE CLAIM OF DEPRECIATION ON ADDITIONS TO COMPUTER SOFTWARE AMOUNTING TO RS. 2,82,05,985/-

4 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. over from Piramal Holdings Ltd. in a manner different from the one calculated by the Appellant. 4. The AO further erred in reducing from the block of assets the sale value as recorded in the books of purchasing company pertaining to glass division and bulk drug division sold in A.Y, 1999-00 on slump sale basis on the alleged ground that the AO has considered it as itemized sale of assets.

5 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. 2. The Appellant prays that the entire expenditure incurred towards advertising and business promotion be allowed as deduction, GROUND NO. IX: ADDITION OF RS. 21,25,00,000/- TOTAL INCOME AND REDUCTION OF DEDUCTION UNDER SECTION 80IC AMOUNTING TO RS.22,25,00,000 1. On the facts and circumstances of the case and in law, the AO erred in following the erroneous direction of the DRP in reducing deduction u/s. 801C by allocating Research and development expenditure of Rs.11,23,00,000/- and interest expenditure of Rs. 1 1,02,00,000/- to fee Baddi unit eligible for deduction u/s. 80IC on the alleged ground that such expenditure are attributable to the said Baddi Unit. 2. The AO failed to appreciate and ought to have held that the • Research and development expenditure arc incurred mainly on Process Development for customs manufacturing (PDG) and it has no connection directly or indirectly with the manufacturing activity carried out at Baddi unit. • The assesses has not made any borrowing specifically for the purpose of setting Baddi unit and it working capital requirement is met by the cash or fund generated in the unit. • The Appellant prays that the AO be directed not to allocate research and development expenditure of Rs.. 11, 2 3 ,00,000/- and interest expenditure of Rs. 11,02,00,000/- to the Baddi Unit. GROUND NO. X : ELIGIBILITY OF DEDUCTION UNDER SECTION 80IC OF THE ACT; 1., On the facts sad circumstance of the ease and in law, the AO erred in following the erroneous direction of the DRP in disallowing the deduction of Rs, 373.57,78,443/- claimed u/s. 80IC in respect of Baddi Unit on the alleged ground that the Baddi Unit is not eligible for deduction u/s. 80IC relying on the order for AY 2008-09. 2. The AO failed to appreciate and ought to have held that the Baddi unit had been formed in AY 2007-08 by introducing fresh capital and purchasing new plant and machinery and it had been not formed by splitting of the existing business of the Appellant. 3. The Appellant prays that the AO be directed 10 allow deduction U/E 80IC of the Act. GROUND NO. XI: ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT OF NOTIONAL INTEREST ON LOAN ADVANCED AMOUNTING TO Rs. 5,01,48,284/-

6 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. 2. The AO failed to appreciate that: a. The rate of interest charged from the Associated enterprises are higher than LIBOR and therefore already at arm's length. b. LIBOR is an appropriate base for benchmarking as compared to the Indian banks rate of interest considering the different stage of economic development of two economies. 3. The Appellant prays that the addition amounting to Rs. 5,01,48,284/- made on account of transfer pricing adjustment of notional interest on loan advanced be deleted. GROUND NO. XII: ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT OF GUARANTEE COMMISSION AMOUNTING TO Rs. 19,15,10,985/-

GROUND NO. XIII: ADDITION OF DISALLOWANCE UN0ER 0ECT1ON 14A BF THE ACT TO COMPUTATION OF BOOK PROFITS UNDER SECTION 115JB OF THE ACT AMOUNTING TO RS. 4,55,36,000/-

7 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. Appellant craves leave to add, amend, alter and/or delete any/all of the above ground of appeal. 3. The first issue that came up for our consideration from ground No.1 of assessee appeal is disallowances of payments made to Piramal Corporate Services Limited (PCSL) of Rs. 2,03,08,000/-. The relevant facts of the impugned disputes are that PCSL is the flagship company of the Piramal group and is responsible for maintaining and furthering the image of the group and ensuring consistent quality of management of the group companies, including the assessee company. Pursuant to an agreement, dated 29/04/1995, PCSL is to provide certain services against reimbursement of actual expenses by the group concerns under clause 5(b) of the agreement. The assessee’s share comes to 53.24 percent and such proportion of the total expenses incurred by PCSL amounting to Rs. 963 Lacs was apportioned to the assessee. In addition, PCSL under clause 5(a) of the same agreement was to receive a royalty at a rate not exceeding 0.5% of the total turnover. The assesse has made a total payment of Rs. 10 crores to PCSL during the period under consideration, which consist of a sum of Rs. 9.63 crores towards reimbursement of expenses and a sum of Rs. 0.37 crores was claimed by the assessee as a payment towards royalty under clause 5(a) of the agreement. The Ld. AO, on the basis of information furnished by the assessee was of the opinion that PCSL has incurred an amount of Rs. 18.09 crores, towards corporate services expenditures, whereas a total of Rs. 22.70 crores has been collected from all the group concerns. Therefore, he opined that the assessee has made excessive payments to PCSL and accordingly, determined disallowances of Rs. 2,03,08,000/- out of total amount paid to PCSL towards reimbursement of

8 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. proportionate expenses, as well as royalty, as per agreement dated 29/04/1995.

9 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. both reimbursement of expenses and royalty. This fact is also clear from the working of reimbursement of expenses and royalty at Page–237 of the paper book, which indicates that an amount of ` 6.75 crore was for reimbursement of expenses and `1.47 crore towards royalty. From the assessment order, prima–facie, it appears that the Assessing Officer while concluding that PEL has charged more to the assessee towards reimbursement of expenses than what is contemplated in the agreement is under a misconception of fact. However, in the order giving effect to the direction of the Commissioner (Appeals), the Assessing Officer has allowed the payment made towards expenditure fully and disallowed the amount of ` 1.47 crore towards royalty. When the terms of the agreement specifically provide for payment of royalty and royalty was paid in compliance to such term, there is no justification for disallowance of royalty payment. Disallowance made is deleted.

10 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. the other hand fairly accepted that this issue is covered in favour of the assessee, however he strongly supported findings of the ld. AO, as well as the Ld. DRP.

11 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. therefore, the same was rightly claimed by it as a revenue expenditure. We thus in terms of our aforesaid observations direct the A.O to allow the software expenses of Rs.14,00,800/- as claimed by the assessee. The Ground of Appeal No. I is allowed. Disallowance of deduction under Sec.35(2AB) in respect of Ennore Unit & Goregaon Unit: Rs.24,89,50,211/-:

12 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. 12. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that for AY 2008-09 and 2009-10 the issue has been restored back to the file of the Ld. AO to provide an opportunity to the assesee to furnish required approval in form 3CM from the competent authority. The relevant findings of the Tribunal are as under:-

13 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. AO and direct him to follow the directions given by the Tribunal for AY 2008-09 and 209-10, while adjudicating the issue.

14 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. 16. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. We find that the co-ordinate bench had considered an identical issue for AY 2009-10 and after considering relevant facts and also, by following the decision of Hon’ble Bombay High Court, in the case of CIT vs Saraswath Infotech Ltd. in ITA No. 124 of 2012 dated 15/01/2013 held that the assesee is entitled for 60% depreciation on computer software and up gradation of existing software. The relevant findings of the Tribunal are as under:-

15 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. count. The Ground of appeal No. III is allowed. Disallowance of claim of depreciation on assets of BMIL and PHL : Rs. 68,75,396/- :

16 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. depreciation on the assets in the A.Y. 1995-96 & A.Y 1996-97. In fact, the assessee had claimed depreciation for the first time on the assets taken over from BMIL. It was observed by the Tribunal that as per the provisions of Sec. 32 of the I-T Act applicable to the relevant assessment year, the assessee was free to either claim or not claim depreciation, as per its own option. On the basis of the aforesaid deliberations, it was concluded by the tribunal that the A.O was not justified in notionally reducing the depreciation for A.Y 1995-96 & A.Y 1996-97 from the WDV of the assets of BMIL while quantifying the depreciation in the hands of the assessee. As a matter of fact, the Tribunal while concluding as hereinabove had relied on a similar view taken by a coordinate bench in the assesses own case viz. Additional CIT Vs. Nicholas Piramal India Ltd. (2012) 150 TTJ 1 (Mum). In the said case the Tribunal drawing support from the judgment of the Hon‟ble Supreme Court in the case of CIT Vs. Mahendra Mills (2000) 159 CTR (SC) 381, had concluded that in the absence of a claim of depreciation by the assessee, the same could not have been thrust upon it even if the particulars were available with the AO. We have perused the order of the Tribunal for A.Y. 2008-09 and finding no reason to take a different view, respectfully follow the same. Apart there from, we are also in agreement with the ld. A.R that now when the DRP while disposing off the objections filed by the assessee had specifically directed the A.O to allow claim of depreciation as was raised by the assessee in respect of BMIL, therefore, there was no reason for the A.O to have not followed such directions while passing the final assessment order u/s 143(3) r.w.s 144C(13), dated 28.01.2014. In terms of our aforesaid observations, we direct the A.O to allow the assesses claim of depreciation insofar the assets of BMIL are concerned. 19. As regards the claim of depreciation raised by the assessee on the assets of PHL which w.e.f 01.06.1996 were taken over by the assessee under a scheme of arrangement duly sanctioned by the Hon‟ble High Court of Bombay, vide its order dated 14.08.1997, we find that the assessee subsequent to the takeover had taken the WDV on the basis of the Income Tax records of PHL. As is discernible from the orders of the lower authorities and admitted by the assessee in its objections raised before the DRP, though PHL had not claimed depreciation on its assets, however, the A.O while framing the assessment in its hands for A.Y 1996-97 had allowed the same. Apart there from, the assessee had during the year relevant to A.Y 1999- 2000 sold its two divisions viz. (i). Glass Division (GGL); and (ii). Bulk Drug Division (BDD) on a slump sale basis. As such, the assessee company in A.Y 1999-2000 while computing the deprecation had dropped the WDV of the aforesaid two undertakings from the respective „block of assets‟ on the date of such „slump sale‟. As observed hereinabove, the A.O declined to accept the claim of the assessee that it was a „slump sale‟ transaction and considered the same as an itemised sale of assets. On the basis of his aforesaid observations, the A.O worked out the WDV of the „block of assets‟ by taking the values of the assets as were recorded in the „books of accounts‟ of the purchasing company, as the sale value, and reduced the same from the different „block of assets‟. In the backdrop of his

17 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. aforesaid reworking of the WDV the A.O scaled down the assesses claim of depreciation in respect of assets of PHL. 20. On a perusal of the records, we find that it is the claim of the assessee that the CIT(A) while disposing off its appeal for A.Y 1999- 2000 had observed that the sale of two divisions viz. (i). Glass Division (GGL); and (ii). Bulk Drug Division (BDD) by the assessee was rightly claimed as „slump sale‟ transaction. However, as is discernible from the order of the DRP, the issue as to whether the sale of the aforesaid two divisions was to be construed as itemized sale of assets or slump sale is pending before the ITAT in the preceding years of the assessee. Accordingly, the DRP had directed the A.O to allow depreciation to the assessee on the basis of the outcome of the main appeal regarding slump sale vs. itemized sale. In the backdrop of the aforesaid fact situation, now when the matter as to whether the sale of the aforesaid two divisions by the assessee is to be treated as an itemized sale or a slump sale is pending in the case of the assessee for the preceding years, therefore, we find no infirmity in the order of the DRP who had rightly directed the A.O to allow depreciation to the assessee on the basis of the outcome of the main appeal. In terms of our aforesaid observations the Ground of appeal No. IV raised by the assessee is partly allowed. 20. In this view of the matter and consistent with view taken by the co-ordinate bench, we direct the Ld. AO to allowed depreciation as claimed by the assessee on BMIL and PHL units.

18 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

19 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. the Ld. AO for re-adjudication in light of the claim of the assessee that impact of grossing up of tax would be nil to profit and loss for the year, if taxes are paid before the due date of filing the return of income.

20 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. expenditure, however restored the matter back to the file of the Ld. AO to verify, whether there is sufficient own funds to cover-up the value of investments. Similarly, in respect of disallowances of other expenditures, the Tribunal has held that only those investments, which yield exempt income can be considered, while computing disallowances as required under Rule 8D(2)(iii) of I.T.Rules, 1962.

21 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. source of the investments made in the exempt income yielding assets, then no disallowance of any part of the interest expenditure can be made u/s 14A r.w Rule 8D(2)(ii). Our aforesaid view is fortified by the judgments of the Hon‟ble High Court of Bombay in the case of (i) HDFC Bank Ltd Vs. DCIT (2016) 383 ITR 529 (Bom); (ii) CIT Vs. HDFC Bank Ltd (2014) 366 ITR 505 (Bom); and (iii) CIT Vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom). In fact, a similar issue had came up before the Tribunal in the assesses own case for the immediately preceding year i.e A.Y 2008-09 viz. M/s Piramal Enterprises Ltd. Vs. Asst. CIT (ITA No. 5471/Mum/2017, dated 30.07.2018). The Tribunal after deliberating on the issue under consideration, had directed the A.O to verify the assesses claim of availability of sufficient interest free funds for the purpose of making investments in exempt income yielding assets, and if the said claim was found to be in order, then no disallowance of interest expenditure U/rule 8D(2)(ii) could be made. We thus respectfully following the view taken by the Tribunal in the assesses own case for A.Y 2008-09 in the backdrop of the aforesaid settled position of law, thus direct the A.O to verify the claim of availability of sufficient interest free funds with the assessee. After verification, if the assesses claim is found to be in order, then the disallowance of the interest expenditure made in its hands u/s 14A r.w 8D(2)(ii) shall be deleted. 25. As regards the disallowance of administrative expenditure U/rule 8D(2)(iii) of Rs. 524.83 lacs is concerned, we are persuaded to be in agreement with the claim of the ld. A.R that while computing the disallowance only the investments which had yielded exempt income during the year under consideration viz. A.Y 2009-10 were to be considered for working out the “average value of investments”. Our aforesaid view is fortified by the order of the „Special Bench‟ of the ITAT, Delhi in the case of ACIT Vs. Vireet Investments Pvt. Ltd. (2017) 165 ITD 27 (Del)(SB). In fact, the Tribunal while disposing off the appeal in the assesses own case for the immediately preceding year i.e A.Y 2008-09 in M/s Piramal Enterprises Ltd. Vs. Asst. CIT (ITA No. 5471/Mum/2017, dated 30.07.2018), had directed the A.O to exclude the investments which had not yielded any exempt income during the relevant previous year for computing the disallowance U/rule 8D(2)(iii). The ld. A.R had during the course of hearing of the appeal furnished before us the working of the disallowance of administrative expenses u/s 14A r.w Rule 8D(2)(iii). As per the said working the disallowance works out at Rs. 20,730.26. The A.O is directed to examine the working of the assessee and decide the issue accordingly after affording an opportunity of being heard to the assessee. The Ground of appeal No. VI is allowed for statistical purposes in terms of our aforesaid observations.

22 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. expenditure incurred in relation to exempt income u/s 14A of the I.T.Act, 1961.

23 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

24 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. as incurring of such an expense was prohibited by law. In the backdrop of the objections raised by the ld. A.R before us, we find that the adverse inferences drawn by the lower authorities as regards the admissibility of the aforesaid expenses has been assailed by the assessee before us on multiple grounds viz. (i) that the Medical Council Regulations, 2002 would though apply to medical practitioners, however, the same were not applicable to the pharmaceutical companies; (ii) that as the CBDT Circular No. 5 of 2012, dated 01.08.2012 imposing prohibition on the medical practitioners and their professional associations from taking any gifts, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied healthcare sector industries was applicable prospectively, therefore, the same was not applicable in the case of the assessee for the year under consideration i.e A.Y. 2009-10; (iii) that in any case the MCD guidelines which came into effect from 10.12.2009 itself were not applicable in the year under consideration; (iv) that the circular issued by the CBDT cannot impose an obligation adverse to an assessee; and (v) that the samples, expenses incurred on conference etc. by the assessee were not in the nature of freebies. 30. We have deliberated at length on the issue under consideration and find that the issue that the expenses incurred by an assessee which is a pharmaceutical company would not be hit by the Explanation 1 to Sec. 37 of the I.T. Act, is covered by the order of a coordinate bench of the Tribunal i.e ITAT “A” Bench, Mumbai in the case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018).The Tribunal after exhaustive deliberations in the aforesaid case, had observed that a perusal of the provisions of the Indian Medical Council Act, 1956, revealed that the scope and ambit of the statutory provisions relating to professional misconduct of registered medical practitioners under the Indian Medical Council Act, 1956, is restricted only to the persons registered as medical practitioners with the State Medical Council and whose name is entered in the Indian Medical Register maintained under Sec. 21 of the said Act. Further, it was observed that the scheme of the Indian Medical Council Act, 1956 neither deals with nor provides for any conduct of any association/society, and deals only with the conduct of individuals registered medical practitioners and not the pharmaceutical companies or allied health sector industries. Apart there from, the Tribunal in its said order had also drawn support from the order of the Hon‟ble High Court of Delhi in the case of MAX Hospital., Pitampura Vs. Medical Council of India [CWP No. 1334/2013, dated 10.01.2014]. In the aforesaid case the Medical Council of India had filed an „Affidavit‟ before the High Court, wherein it was deposed by the council that its jurisdiction was limited only to take action against the registered medical professionals under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, and it has no jurisdiction to pass an order affecting the rights/interest of the petitioner hospital. In the backdrop of its exhaustive deliberations, the Tribunal had concluded that even if the assessee had incurred expenditure on distribution of „freebies‟ to doctors and medical practitioners, the same though may not be in conformity with the Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations,

25 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. 2002, however as the same only regulates the code of conduct of the medical practitioners/doctors, therefore, in the absence of any prohibition on the pharmaceutical companies in incurring of such sales promotion expenses, it cannot be held to have incurred an expenditure for a purpose which is an offence or is prohibited by law. The Tribunal while concluding as hereinabove, had observed as under: “20. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence in the cross appeals filed by the assessee and the revenue has been sought for adjudicating the allowability of the sales promotion expenses incurred by the assessee on the distribution of articles to the stockists, distributors, dealers, customers and doctors, in the backdrop of the CBDT Circular No. 5/2012, dated 01.08.2012 and the MCI regulations. We find that it is the case of the revenue that as per the CBDT Circular No. 5/2012, dated 01.08.2012 any expense incurred by a pharmaceutical or allied health sector industry in providing any “freebies” to medical practitioners or their professional associations in violation of the regulation issued by Medical Council of India which is a regulatory body constituted under the Medical Council Act, 1956, would be liable to be disallowed in the hands of such pharmaceutical or allied health sector industry or any other assessee which had provided such “freebies” and claimed the same as a deductible expense against its income in the accounts. 21. We have deliberated at length on the issue under consideration and after perusing the regulations issued by the Medical Council of India, find that the same lays down the code of conduct in respect of the doctors and other medical professionals registered with it, and are not applicable to the pharmaceuticals or allied health sector industries. Rather, a perusal of the provisions of the Indian Medical Council Act, 1956, reveals that the scope and ambit of statutory provisions relating to professional conduct of registered medical practitioners under the Indian Medical Council Act, 1956 is restricted only to the persons registered as medical practitioners with the State Medical Council and whose name are entered in the Indian Medical Register maintained under Sec. 21 of the said Act. We are of the considered view that the scheme of the Indian Medical Council Act, 1956 neither deals with nor provides for any conduct of any association/society and deals only with the conduct of individual registered medical practitioners. In the backdrop of the aforesaid facts, it emerges that the applicability of the MCI regulations would only cover individual medical practitioners and not the pharmaceutical companies or allied health sector industries. Interestingly, the scope of the applicability of the MCI regulations was looked into by the Hon‟ble High Court of Delhi in the case of Max Hospital, Pitampura Vs. Medical Council of India (CWP No. 1334/2013, dated 10.01.2014). In the aforementioned case the MCI had filed an „Affidavit‟ before the High Court, wherein it was deposed by the council that its jurisdiction is limited only to take action against the registered medical professionals under the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, and it has no jurisdiction to pass any order affecting the rights/interest of the petitioner hospital. We are of the considered view that on the basis of the aforesaid deposition of MCI that its jurisdiction stands restricted to the

26 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. registered medical professionals, it can safely be concluded that the MCI regulations would in no way impinge on the functioning of the assessee company which is engaged in the business of manufacturing and sale of pharmaceutical and allied products. We thus, in the backdrop of our aforesaid deliberations are of the considered view that the code of conduct enshrined in the MCI regulations are solely meant to be followed and adhered by medical practitioners/doctors, and such a regulation or code of conduct would not cover the pharmaceutical company or healthcare sector in any manner. We are further of the view that in the backdrop of our aforesaid observations, as the Medical Council of India does not have any jurisdiction under law to pass any order or regulation against any hospital, pharmaceutical company or any healthcare sector, then any such regulation issued by it cannot have any prohibitory effect on the manner in which the pharmaceutical company like the assessee conducts its business. On the basis of our aforesaid observations, we are unable to comprehend that now when the MCI has no jurisdiction upon the pharmaceutical companies, then where could there be an occasion for concluding that the assessee company had violated any regulation issued by MCI. We thus, in terms of our aforesaid observations are of the considered view that even if the assessee had incurred expenditure on distribution of “freebies” to doctors and medical practitioners, the same though may not be in conformity with the Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 (as amended on 10.12.2009), however, as the same only regulates the code of conduct of the medical practitioners/doctors, therefore, in the absence of any prohibition on the pharmaceutical companies in incurring of such sales promotion expenses, the latter cannot be held to have incurred an expenditure for a purpose which is an offence or is prohibited by law. In this regard we are reminded of the maxim “Expressio Unius Est Exclusio Alterius”, which provides that if a particular expression in the statute is expressly stated for a particular class of assessee, then by implication what has not been stated or expressed in the statute has to be excluded for other class of assesses. Thus, now when the MCI regulations are applicable to medical practitioners registered with the MCI, then the same cannot be made applicable to pharmaceutical companies or other allied healthcare companies. 22. We shall now advert to the CBDT Circular No. 5/2012, dated 01.08.2012. We find that the aforesaid CBDT Circular reads as under:- “Inadmissibility of expenses incurred in providing freebees to medical practitioner by pharmaceutical and allied health sector industry Circular No. 5/2012 [F.No. 225/142/2012-ITA.II], dated 1-8-2012 It has been brought to the notice of the Board that some pharmaceutical and allied health sector Industries are providing freebies (freebies) to medical practitioner and their professional associations in violation of the regulations issued by Medical Council of India (the „Council‟) which is a regulatory body constituted under the Medical Council Act, 1956 2. The council in exercise of its statutory powers amended the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (the regulations) on 10-12-2009 imposing a prohibition on the medical practitioner and their professional associations from taking any Gift,

27 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. Travel facility, Hospitality, Cash or monetary grant from the pharmaceutical and allied health sector Industries. 3. Section 37(1) of Income Tax Act provides for deduction of any revenue expenditure (other than those failing under sections 30 to 36) from the business income if such expense is laid out/expended wholly or exclusively for the purpose of business or profession. However, the explanation appended to this sub-section denies claim of any such expenses, if the same has been incurred for a purpose which is either an offence or prohibited by law. Thus, the claim of any expense incurred in providing above mentioned or similar freebees in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 shall be inadmissible under section 37(1) of the Income Tax Act being an expense prohibited by the law. This disallowance shall be made in the hands of such pharmaceutical or allied health sector Industries or other assessee which has provided aforesaid freebees and claimed it as a deductible expense in its accounts against income. 4. It is also clarified that the sum equivalent to value of freebees enjoyed by the aforesaid medical practitioner or professional associations is also taxable as business income or income from other sources as the case may be depending on the facts of each case. The assessing officers of such medical practitioner or professional associations should examine the same and take an appropriate action. This may be brought to the notice of all the officers of the charge for necessary action.” We may herein observe that a perusal of the aforesaid CBDT Circular reveals that the “freebies” provided by the pharmaceutical companies or allied health sector industries to medical practitioners or their professional associations in violation of the provisions of Indian Medical Council (Professional Conduct, Etiquette and Ethics) regulations, 2002 shall be inadmissible under Sec. 37(1) of the Income Tax Act, 1961, as the same would be an expense prohibited by the law. We are of the considered view that as observed by us hereinabove, the code of conduct enshrined in the notifications issued by MCI though is to be strictly followed and adhered by medical practitioners/doctors registered with the MCI, however the same cannot impinge on the conduct of the pharmaceutical companies or other healthcare sector in any manner. We find that nothing has brought on record which could persuade us to conclude that the regulations or notifications issued by MCI would as per the law also be binding on the pharmaceutical companies or other allied healthcare sector. Rather, the concession made by the MCI before the Hon‟ble High Court of Delhi in the case of Max Hospital Vs. MCI (CWP No. 1334/2013, dated 10.01.2014) fortifies our aforesaid view that MCI has no jurisdiction to pass any order or regulation against any hospital, pharmaceutical company or any healthcare sector. We further find that MCI had by adding Para 6.8.1 to its earlier notification issued as “Indian Medical Council Professional (Conduct, Etiquette and Ethics) Regulations, 2002” had even provided for action which shall be taken against medical practitioners in case they contravene the prohibitions placed on them. We find from a perusal of Para 6.8.1 that in case of receiving of any gift from

28 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. any pharmaceutical or allied health care industry and their sales people or representatives, action stands restricted to the members who are registered with the MCI. In other words the censure/action as had been suggested on the violation of the code of conduct is only for the medical practitioners and not for the pharmaceutical companies or allied health sector industries. We are thus of the considered view that the regulations issued by MCI are qua the doctors/medical practitioners registered with MCI, and the same shall in no way impinge upon the conduct of the pharmaceutical companies. As a logical corollary to it, if there is any violation or prohibition as per MCI regulation in terms of Explanation to Sec. 37(1), then the same would debar the doctors or the registered medical practitioners and not the pharmaceutical companies and the allied healthcare sector for claiming the same as an expenditure.” 31. Apart there from, we are also in agreement with the alternative contention advanced by the ld. A.R that though a benevolent CBDT Circular may apply retrospectively, but a circular imposing a burden has to apply prospectively only. As a result thereof, now when the CBDT Circular No, 5/2012 was issued only as on 01.08.2012, therefore, the same would not be applicable to the case of the assessee before us i.e for the period relevant to A.Y 2009-10. In fact, the aforesaid issue as regards the period of applicability of the CBDT Circular No. 5/2012, dated 01.08.2012 was also looked into by the ITAT “A” Bench, Mumbai, in the aforementioned case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018), wherein it was observed as under : “25. We thus, in the backdrop of the aforesaid settled position of law as regards the prospective applicability of an oppressive circular, are of the considered view that as the CBDT as per its Circular No. 5/2012, dated 01.08.2012 had enlarged the scope of Indian Medical Council Regulation, 2002, and had made the same applicable to the pharmaceutical companies, thus the same cannot be reckoned to have a retrospective effect. We find that a coordinate bench of the Tribunal viz. ITAT, Mumbai in the case of Syncom Formulations (I) Ltd. Vs. DCIT-8(3), Mumbai (ITA No. 6428 & 6429/Mum/2012, dated 23.12.2015) for A.Ys 2010-11 and 2011-12 had concluded that the aforesaid CBDT Circular No. 5/2012, dated 01.08.2012 would not be applicable to the A.Ys 2010-11 and 2011- 12, as the same was introduced w.e.f. 01.08.2012. We thus, in terms of our aforesaid observations are of the considered view that the aforementioned CBDT Circular No. 5/2012, dated 01.08.2012 would not be applicable to the case of the assessee before us for A.Y. 2011-12.”

29 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. assesses without any sanction or authority of law. We find that the aspect that the CBDT is divested of it powers to enlarge the scope of MCI regulation by extending the same to pharmaceutical companies, without any enabling provision either under the Income tax Act or the Indian Medical Regulations, was also deliberated upon by the Tribunal in the case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018), wherein in context of the issue under consideration it was observed as under : “23. We find that the CBDT as per its Circular No. 5/2012, dated 01.08.2012 had enlarged the scope and applicability of Indian Medical Council Regulation, 2002, by making the same applicable even to the pharmaceutical companies or allied healthcare sector industries. We are of the considered view that such an enlargement of the scope of MCI regulation to the pharmaceutical companies by the CBDT is without any enabling provision either under the Income Tax Act or under the Indian Medical Council Regulations. We are of a strong conviction that the CBDT cannot provide casus omissus to a statute or notification or any regulation which has not been expressly provided therein. Still further, though the CBDT can tone down the rigours of law in order to ensure a fair enforcement of the provisions by issuing circulars for clarifying the statutory provisions, however, it is divested of its power to create a new impairment adverse to an assessee or to a class of assessee without any sanction or authority of law. We are of the considered view that the circulars which are issued by the CBDT must confirm to the tax laws and though are meant for the purpose of giving administrative relief or for clarifying the provisions of law, but the same cannot impose a burden on the assessee, leave alone creating a new burden by enlarging the scope of a regulation issued under a different act so as to impose any kind of hardship or liability on the assessee. We thus, are unable to persuade ourselves to subscribe to the rigours contemplated in the CBDT Circular No. 5/2012, dated 01.08.2012, which we would not hesitate to observe, despite absence of anything provided by the MCI in its regulations issued under the Medical Council Act, 1956, contemplating that the regulation of code of conduct would also cover the pharmaceutical companies and healthcare sector, however provides that in case a pharmaceutical or allied health sector industry incurs any expenditure in providing any gift, travel facility, cash, monetary grant or similar freebies to medical practitioners or their professional associations in violation of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, the expenditure incurred on the same shall be disallowed in the hands of such pharmaceutical or allied health sector industry. We are of the considered view that the burden imposed by the CBDT vide its aforesaid Circular No. 5/2012, dated 01.08.2012 on the pharmaceutical or allied health sector industries, despite absence of any enabling provision under the Income Tax law or under the Indian Medical Council Regulations, clearly impinges on the conduct of the pharmaceutical and allied health sector industries in carrying out its business. We thus, in the absence of any sanction or authority of law on the basis of which it could safely be concluded that the expenditure incurred by the assessee company on sales promotion expenses by way of distribution of articles to the stockists, distributors, dealers, customers

30 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. and doctors, is in the nature of an expenditure which had been incurred for any purpose which is either an offence or prohibited by law, thus conclude that the same would not be hit by the Explanation to Sec. 37(1) of the Act.” 33. We thus in terms of our aforesaid observations and respectfully following the view taken by the coordinate bench of the Tribunal i.e ITAT “A” Bench, Mumbai, in the case of Aristo Pharmaceuticals Pvt. ltd. Vs. ACIT (ITA No. 6680/Mum/2012, dated 26.07.2018), are of the considered view that the expenditure of Rs. 55,81,68,692/- incurred by the assessee towards advertisement and its business promotion under three heads viz. (i) Key Account Manager (KAM) Expenses; (ii) Customer Relation Manager (CRM) Expenses; and (iii) Gift Articles would not be hit by the “Explanation” to Sec. 37 of the I-T Act. 34. Insofar the observations of the lower authorities that the assessee had not been able to fully substantiate its claim of expenses, we are unable to subscribe to the same. As a matter of fact, the A.O in the course of the assessment proceedings had vide his letter dated 06.03.2013 directed the assessee to file sample bills of expenses in respect of (i) Key Account Manager (KAM) Expenses; (ii) Customer Relation Manager (CRM) Expenses; and (iii) Gift Articles, which admittedly were filed by the assessee. Thereafter, the A.O without pointing out any specific instance with reference to any such sample bill or had made a general observation, that the assessee besides the statement that was made by it in the ledger that a certain amount was given to CRM/KAM Manager, had no other primary evidence. Further, it is also observed by him that as in certain cases it was also not known as to who was the beneficiary of the amount that was given and what was the benefit that was accorded, therefore, the expenses claimed by the assessee cannot be considered as established to have been incurred by it wholly and exclusively in the course of its business. We are unable to persuade ourselves to endorse the aforesaid observations of the A.O for drawing of adverse inferences as regards the aforesaid expenses incurred by the assessee. As a matter of fact, as is discernible from the assessment order, the A.O except for directing the assessee to furnish sample bills, had at no stage called upon it to substantiate the same on the basis of any further material. At least, no such exercise carried out by the A.O can be gathered from the orders of the lower authorities. Apart there from, nothing has been brought to our notice by the ld. D.R in the course of hearing of the appeal which would have persuaded us to have arrived at a different view. Be that as it may, we find that the A.O even at the time of disallowing 50% of the expenses i.e Rs. 27,90,84,346/-, had observed that the same were being disallowed as majority of the expenses were incurred for giving “freebies” to doctors for promotion of assesses business which was inadmissible u/s 37(1) of the I-T Act, being an expense prohibited by law. We thus on the basis of our aforesaid observations, being of the considered view that the A.O/DRP had erred in making an adhoc disallowance of Rs. 27,90,84,346/- i.e 50% of the advertisement and business promotion expenses, therefore, delete the same. The Ground of appeal No. VII is allowed in terms of our aforesaid observations.

31 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

32 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. the profit rate of Baddi unit and the other units. As is discernible from the records, the department had failed to place on record any cogent and irrefutable material which would conclusively establish that the borrowed funds were utilised in setting up the Baddi unit and further the R&D expenditure incurred was in context of the manufacturing activity carried out at the Baddi unit. Apart there from, there is also no clarity on the fact whether the assessee had maintained unit wise accounts and the expenditure claimed is as per the accounts. In nut shell, there is no evidence which would justify attribution and allocation of the interest expenditure and the R&D expenditure to the Baddi unit of the assessee. We find that similar facts were involved as regards allocation of the aforesaid expenses viz. (i). interest expenditure; and (ii). R&D expenses, in the assesses own case for the immediately preceding year i.e A.Y 2008-09 before the Tribunal viz. M/s Piramal Enterprises Ltd. Vs. Addl.CIT, Circle-7(1), Mumbai. The Tribunal observing that as the revenue had failed to bring on record any cogent material to establish that the borrowed funds were utilised in setting-up the Baddi unit and further the R&D expenditure incurred was related to manufacturing activity carried out at the Baddi unit, had thus in all fairness restored the issue to the file of the A.O for fresh adjudication, after affording an opportunity of being heard to the assessee. As the fact situation in context of the issue before us remains the same, therefore, respectfully following the order passed by the Tribunal in the assesses own case for the immediately preceding year i.e A.Y 2008-09, we restore the matter to the file of the A.O for fresh adjudication. Needless to say, the A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee. The Ground of appeal No. IX is allowed for statistical purposes.

33 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. the other hand, fairly accepted that the issue is covered in favour of the assessee by the decision of ITAT for AY 2009-10. But, he strongly supported order of the Ld. AO, as well as the Ld. DRP.

34 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. that the Baddi unit of the assessee was set-up/formed on 10.06.2006 i.e the period relevant to A.Y 2007-08. In fact, the A.O while framing the assessment of the assessee for A.Y 2007-08 had after making necessary verifications as regards satisfaction of the requisite conditions, had allowed the assesses claim of deduction u/s 80IC of Rs. 114,53,66,695/-. As a matter of fact, the A.O while framing the assessment in the case of the assessee u/s 143(3), dated 18.12.2009 for A.Y 2007-08 had specifically observed that the assessee had commenced production at its new unit at Baddi, observing as under (Page 294 of „APB‟) : “During the year the assessee has commenced production at a new unit at Baddi, Himachal Pradesh which is entitled to deduction u/s 80IC Apart there from, the A.O had reopened the case of the assessee for A.Y 2007-08 under Sec. 147 for the purpose of reallocating certain expenses to its Baddi unit, which he was of the view that the assessee company had allocated to its said unit on the lower side. However, at no stage the claim of deduction raised by the assessee for the said initial year i.e the year of “formation” of the Baddi unit was sought to be declined or dislodged on the ground that as the assessee had failed to have satisfied the conditions prescribed in Sec. 80IC(4), thus it was not eligible for the same. On the basis of our aforesaid observations, we are of the considered view that now when admittedly the Baddi unit was “formed” by the assessee on 10.06.2006 i.e the period relevant to A.Y 2007-08, therefore, in the backdrop of the settled position of law as had been deliberated by us at length hereinabove, the satisfaction of the conditions prescribed in Sec. 80IC(4) was confined to the initial year i.e year of “formation” viz. A.Y 2007-08. In fact, we are of the considered view that now when the A.O had vide his assessment framed u/s 143(3), dated 18.12.2009 for A.Y 2007-08, had allowed the assesses claim of deduction u/s 80IC, therefore, there could have been no reason for him to have drawn adverse inferences as regards the eligibility of the assesses towards claim of such deduction during the year under the consideration viz. A.Y 2009-10 i.e the 3rd year of its operation, on the ground that the assessee had violated the conditions of constitution/formation as envisaged in Sec. 80IC(4). Be that as it may, as the satisfaction of the conditions prescribed in Sec. 80IC(4) is required to be looked into in the year of “formation”, therefore, we are persuaded to subscribe to the contentions advanced by the ld. A.R that no adverse inferences as regards the eligibility of the claim of deduction for the alleged nonsatisfaction of the conditions therein provided could have been validly drawn in the hands of the assesse while framing its assessment for the year under consideration viz. A.Y 2009-10 i.e the 3rd year of operation.

35 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. without appreciating the fact that eligibility criteria for claiming deduction needs to be examined in the year of formation of the unit. Hence, we are in agreement with the claim of the assessee that the eligibility criteria shall be examined only in the year of constitution/ formation of the units as envisaged in section 80IC(4) of the I.T.Act, 1961.

36 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. determined by applying Indian PLR. The relevant findings of the Tribunal are as under;-

37 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

38 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. additions made towards book profit computed u/s 115JB of the Act, in respect of disallowances made u/s 14A of the I.T.Act, 1961.

ITA No.1832/Mum/2015:

39 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. of facts, the additions made by the Ld. AO towards disallowances of amortization of expenses on account of trademarks has been deleted by the Tribunal. The Ld. DR, on the other hand, strongly supported order of the Ld. AO, as well as the Ld. DRP.

40 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited. aforesaid appeal before the Hon‟ble Jurisdictional High Court in the case of “SPPL” for A.Y 1998-99, being conscious of the fact that if it succeeded on the ground of entitlement of the assessee towards deduction u/s 35A on the trade marks, then the deduction of the entire expenditure of Rs. 34 crore in terms of the observations of the tribunal had to be allowed in one go u/s 37 of the I-T Act, which would thus put it in a much more disadvantageous position, had thus for the said reason not pressed its appeal before the High Court on the issue of allowability of claim of deduction u/s 35A of the I.T Act. In the backdrop of the aforesaid facts, the Tribunal while disposing off the appeal of the assessee for the preceding year i.e A.Y 2008-09 observed that as the claim of the assessee for deduction u/s 35A was allowed in the preceding years, thus applying the rule of consistency allowed the same during the year before them. We have given a thoughtful consideration and are of the considered view that as the assesses claim of deduction u/s 35A had consistently been allowed by the Tribunal in the preceding years, therefore, respectfully following the view taken by the Tribunal while disposing off the appeal of the assessee for A.Y 2008-09, the disallowance made by the A.O/DRP u/s 35A of Rs. 2,42,85,714/- during the year under consideration viz. A.Y 2009-10 is vacated. The Ground of appeal No. VII is allowed.

41 ITA Nos.1754 & 1832/Mum/2015 Piramal Enterprise Limited (Formerly known as Piramal Healthcare Limited.

Order pronounced in the open court on this 15 /01/2020

Sd/- Sd/- (MAHAVIR SINGH) (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 15/ 01//2020 Thirumalesh Sr.PS Copy of the Order forwarded to : The Appellant 1. The Respondent. 2. The CIT(A), Mumbai. 3. CIT 4. DR, ITAT, Mumbai 5. BY ORDER, 6. Guard file. स�यािपत �ित //True Copy// (Asstt. Registrar) ITAT, Mumbai