DCIT 1(2)2, MUMBAI vs. MAHYCO MONSANTO BIOTECH (I) LTD, MUMBAI

M/s Mahyco Monsanto DCIT - 1(2) (2), R. No. 535, 5th floor, Biotech (I) Ltd. 5th floor, Ahura Centre, 96 बिधम/ Aayakar Bhavan, Mahakali Caves Rd, Mumbai-400 020 Vs. Andheri(east) Mumbai-400093. स्थायीलेखासं./जीआइआरसं./ PAN No. AABCM0176B (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Shri V. Vidhyadhar , DR प्रत्यथीकीओरसे/Respondentby : Shri Kirit Kamdar,AR सुनवाईकीतारीख/ : 07.06.18 Date of Hearing घोषणाकीतारीख / : 04.07.2018 Date of Pronouncement आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

M/s Mahyco Monsanto Biotech (I) Ltd. "1. "on facts and in the circumstances of the case and in Law, the CIT(A) erred in deleting the disallowance of Rs. 1,79,09,9391- pertaining to trial expenses in respect of Bollgard II ('BG II') Technology, without appreciating the Assessing Officer's findings that the same is nothing but a variety of new seed of cotton introduced by the assessee company during the year under consideration and trial expenses are part of normal business activities of introducing new seeds in the market, which needs to be capitalized u/s. 32 of the Income Tax Act, 1961?"

M/s Mahyco Monsanto Biotech (I) Ltd. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the revenue in para no. 4(4.1 to 4.3) of its order. The operative portion of the order of Ld. CIT(A) is contained in sub-para no. 4.3 of its order and the same is reproduced below:-

4.3. The submissions of the Appellant have been considered. As is evident from the submissions, the Appellant is not engaged in independently developing any technology. In fact, the Appellant is principally involved in promoting, marketing and sublicensing of the trait technology licensed to it by its JV partners. Accordingly, the trial expenses incurred by the Appellant which are merely for commercialization of Bollgard II technology provide no enduring benefit to the Appellant and ought not to be capitalized. Therefore, in my considered opinion, the action of the Assessing Officer is not found to be justifiable and the disallowance made by the Assessing Officer is hereby deleted.

After having gone through the facts of the present case as well as considering the orders passed by revenue authorities and M/s Mahyco Monsanto Biotech (I) Ltd. submissions made by both the parties, we find that Ld. CIT(A) after rightly appreciating the facts of the present case had concluded that assessee was not engaged in independently developing any technology and in fact, the assessee was principally involved in promoting, marketing and sublicensing of the trait technology licensed to it by its JV partners. It was thus rightly held that the trial expenses incurred by the assessee were merely for commercialization of Bollgard II technology provide no enduring benefit to the assessee and ought not to be capitalized. Therefore, Ld. CIT(A) correctly found that the action of the Assessing Officer was not justifiable and the disallowance made by the Assessing Officer was correctly deleted.

Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are M/s Mahyco Monsanto Biotech (I) Ltd. judicious and are well reasoned. Resultantly, this ground raised by the revenue stands dismissed.