THERMO FISHER SCIENFTIFIC INDIA P. LTD,MUMBAI vs. DCIT 15(3)(1), MUMBAI

ITA 1236/MUM/2016Status: DisposedITAT Mumbai02 January 2026AY 2011-1267 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee's grounds concerning depreciation on contracts acquired from GSK and CTPL (Grounds 2 and 3) were allowed, implying that the assessee was granted depreciation on these contracts. For Grounds 4 to 9, relating to brought forward and unabsorbed depreciation of preceding assessment years, the Tribunal restored the issue to the file of the Assessing Officer (AO) with similar directions as in the preceding year's appeal, allowing these grounds for statistical purposes. Regarding the transfer pricing adjustment for the purchase of finished goods (Ground 10), the Tribunal directed the TPO/AO to consider Satyatej Commercial Co. Ltd. as a comparable, aligning with the assessee's submission and a prior finding, thus allowing the ground. For the transfer pricing adjustment concerning the receipt of indenting commission (Grounds 11 and additional Ground 16), the Tribunal set aside the impugned adjustment and restored the issue to the file of the TPO with directions to the assessee to produce the relevant Sales Representative Agreement of Hand Innovations Inc. The TPO was directed to exclude Hand Innovations Inc. if its functional profile was found similar to previously excluded companies, in line with a co-ordinate bench decision, allowing the grounds for statistical purposes. Grounds 12-14, concerning the grant of credit of TDS/TCS/advance tax, were also restored to the AO with similar directions as in the preceding year, allowing them for statistical purposes. Ground 15, pertaining to the initiation of penalty proceedings under section 271(1)(c), was dismissed as premature. The appeals were partly allowed for statistical purposes.

What were the facts?

The assessee, Thermo Fisher Scientific India Pvt. Ltd., filed appeals against final assessment orders passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961, pursuant to directions from the Dispute Resolution Panel (DRP) for assessment years 2011-12, 2012-13, 2013-14, and 2014-15. The appeals were consolidated for hearing. The primary grounds of appeal concerned the denial of depreciation on various contracts acquired from Glaxosmithkline Pharmaceuticals Ltd. (GSK) and Chemito Technologies Private Limited (CTPL), consequential depreciation on software expenses, allowance of brought forward unabsorbed depreciation from earlier assessment years, and transfer pricing adjustments related to the purchase of finished goods and receipt of indenting commission. The assessee also challenged the initiation of penalty proceedings.

What were the issues?

1. Whether the assessee is entitled to depreciation under section 32(1) read with section 2(11) of the IT Act on manufacturing, supply, and maintenance contracts acquired from GSK and CTPL, treating them as intangible assets or goodwill (mixed law and fact)? - Assessee's contention: The contracts are not self-generated, were transferred, and qualify as intangible assets or goodwill eligible for depreciation. - Revenue's contention: Not recorded in the judgment. 2. Whether the assessee is entitled to consequential depreciation on software expenses capitalized in AY 2007-08 (mixed law and fact)? - Assessee's contention: The DRP had directed its allowance, but the DCIT erred in not following it. - Revenue's contention: Not recorded in the judgment. 3. Whether the assessee is entitled to the allowance of brought forward unabsorbed depreciation for AYs 2008-09, 2009-10, and 2010-11, including that related to goodwill purchased from GSK and CTPL, and software expenses (mixed law and fact)? - Assessee's contention: The lower authorities erred in not allowing the brought forward unabsorbed depreciation as per the return of income and on purchased goodwill and software expenses. - Revenue's contention: Not recorded in the judgment. 4. Whether the transfer pricing adjustment in respect of the international transaction of the purchase of finished goods is valid, and if Satyatej Commercial Co. Ltd. should be considered a comparable (mixed law and fact)? - Assessee's contention: Sought inclusion of Satyatej Commercial Co. Ltd. as a comparable. - Revenue's contention: Relied on the order passed by the lower authorities. 5. Whether the transfer pricing adjustment in respect of the international transaction of receipt of indenting commission is valid, and if Hand Innovations Inc. should be excluded as a comparable (mixed law and fact)? - Assessee's contention: Sought exclusion of Hand Innovations Inc. based on a co-ordinate bench decision. - Revenue's contention: Not recorded in the judgment. 6. Whether the initiation of penalty proceedings under section 271(1)(c) is premature (law)? - Assessee's contention: The initiation is premature. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 32(1),Section 2(11),Section 143(3),Section 144C(13),Section 144C(5),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “H” BENCH, MUMBAI

Before: SHRI VIKRAM SINGH YADAVSHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Dhanesh Bafna, Shri Anmol Mahajan, Ms. Hinal Shah
For Respondent: Shri Pravin Salunkhe, Sr.DR

Heard together (4 matters)

ITA No.1236/MUM/2016
ITA No.7393/MUM/2017
ITA No.577/MUM/2017
ITA No.7294/MUM/2018

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

PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeals against the separate final assessment order passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 ("the Act") pursuant to the directions issued by the learned Dispute Resolution Panel - 2, Mumbai [“/earned DRP’’], under section ITAs No.1236/Mum/2016, 577/Mum/2017, 7393/Mum/2017 & 7294/Mum /2018 | (A-Ys. 2011-12, 2012-13, 2013-14 & 201

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 32(1)

All 386 judgments and leading authorities on Section 32(1) →

Recent GST High Court judgments

Search GST case law →