Zandu Pharmaceuticals Works Ltd. v. CIT

350 ITR 366High Court2013#1675 most cited

What is Zandu Pharmaceuticals Works Ltd. v. CIT authority for?

Expenses, including scientific research or head office expenses, cannot be allocated to units eligible for deductions under sections 80IB or 80IC unless there is a clear nexus between the expenditure and the specific eligible unit for computing the deduction.

68

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2016 to 2026.

Also referred to as

Zandu Pharmaceuticals Works Ltd. v. CIT · section 80IB deduction · section 80IC deduction · allocation of expenses · scientific research expenses · R&D expenditure · nexus with eligible unit · head office expenses · computation of deduction · 350 ITR 366

Also reported as

259 CTR 253

Sections most often in play

Section 80ICSection 80IBSection 92CASection 143(3)Section 115JBSection 144C(3)Section 14ASection 35(2AB)

Issues it is cited on

section 92ba(i)r&d expendituresection 35(1)(iv)section 80ieexport oriented unitsection 100section 6(1)profit split methodbright line testsection 35(2ab)resale price methodsection 36(l)(va)

Judgments citing Zandu Pharmaceuticals Works Ltd. v. CIT

M/S. Dabur India Ltd., New Delhi vs. Addl.CIT, New Delhi

In the result, the appeals filed by the Revenue are partly allowed and the appeals filed by the assessee are partly allowed for statistical purposes

ITA 6525/DEL/2014[2008-09]Status: DisposedITAT Delhi18 Feb 2021AY 2008-09

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Anupam Kant Garg, CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80GSection 80ISection 92CSection 92E

…lakhs is concerned, the finding of the ld. CIT(A) that such expenses have no nexus with the units eligible for deduction has not been controverted by the Revenue. We find, the Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. vs. CIT, 350 ITR 366 (Bom) has held that once the expenses have no nexus with the units eligible for deduction, such expenses cannot be allocated to units for the purpose of computing deduction u/s 80IB/80IC of the Act. Since the scientific research expenses of Rs.651 lakhs which were included in the head office expenses allocated by the AO are not connected with the…

DCIT, New Delhi vs. M/S. Dabur India Ltd., New Delhi

In the result, the appeals filed by the Revenue are partly allowed and the appeals filed by the assessee are partly allowed for statistical purposes

ITA 6256/DEL/2014[2008-09]Status: DisposedITAT Delhi18 Feb 2021AY 2008-09

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Anupam Kant Garg, CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80GSection 80ISection 92CSection 92E

…lakhs is concerned, the finding of the ld. CIT(A) that such expenses have no nexus with the units eligible for deduction has not been controverted by the Revenue. We find, the Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. vs. CIT, 350 ITR 366 (Bom) has held that once the expenses have no nexus with the units eligible for deduction, such expenses cannot be allocated to units for the purpose of computing deduction u/s 80IB/80IC of the Act. Since the scientific research expenses of Rs.651 lakhs which were included in the head office expenses allocated by the AO are not connected with the…

M/S. Dabur India Ltd., New Delhi vs. Addl.CIT, New Delhi

In the result, the appeals filed by the Revenue are partly allowed and the appeals filed by the assessee are partly allowed for statistical purposes

ITA 3241/DEL/2014[2007-08]Status: DisposedITAT Delhi18 Feb 2021AY 2007-08

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Anupam Kant Garg, CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80GSection 80ISection 92CSection 92E

…lakhs is concerned, the finding of the ld. CIT(A) that such expenses have no nexus with the units eligible for deduction has not been controverted by the Revenue. We find, the Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. vs. CIT, 350 ITR 366 (Bom) has held that once the expenses have no nexus with the units eligible for deduction, such expenses cannot be allocated to units for the purpose of computing deduction u/s 80IB/80IC of the Act. Since the scientific research expenses of Rs.651 lakhs which were included in the head office expenses allocated by the AO are not connected with the…

DCIT, New Delhi vs. M/S. Dabur India Ltd., New Delhi

In the result, the appeals filed by the Revenue are partly allowed and the appeals filed by the assessee are partly allowed for statistical purposes

ITA 3114/DEL/2014[2007-08]Status: DisposedITAT Delhi18 Feb 2021AY 2007-08

Bench: Shri R.K. Panda & Ms Suchitra Kamble

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Anupam Kant Garg, CIT-DR
Section 115JSection 143(1)Section 143(2)Section 143(3)Section 80GSection 80ISection 92CSection 92E

…lakhs is concerned, the finding of the ld. CIT(A) that such expenses have no nexus with the units eligible for deduction has not been controverted by the Revenue. We find, the Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. vs. CIT, 350 ITR 366 (Bom) has held that once the expenses have no nexus with the units eligible for deduction, such expenses cannot be allocated to units for the purpose of computing deduction u/s 80IB/80IC of the Act. Since the scientific research expenses of Rs.651 lakhs which were included in the head office expenses allocated by the AO are not connected with the…

Neelkanth Palm Realty, Mumbai vs. Asst CIT Cir 15(3), Mumbai

ITA 2703/MUM/2014[2009-10]Status: DisposedITAT Mumbai08 Dec 2020AY 2009-10

Bench: Shri C. N. Prasad, Jm & Shri Shri S. Rifaur Rahman, Am आयकरअपीलसं./ I.T.A. No. 2703/Mum/2014 (निर्धारणवर्ा / Assessment Year: 2009-10)

For Appellant: Shri Nitesh Joshi & ShriFor Respondent: Ms. Kavita P. Kaushik, DR
Section 80Section 80I

…as for sale of TDR. Further he submitted that the profit to be claimed as deduction under section 80 IB (10) should be derived from the project only after considering direct income and direct expenses. For that purpose, he relied on the case of Zandu Pharma – 350 ITR 366. In the said decision, the Hon’ble Court held that head office expenses not to be considered for deduction under section 80 IB. Further he relied in the case of Hindustan Unilever Ltd – 394 ITR 73. He brought to our notice page 77 of the said order in which the Hon’ble Court referred to the above case i.e., Zandu Pharma case (supra). 9. He furth…

Deputy Commissioner of Income Tax, Bangalore vs. M/S Infosys Bpo Ltd, Bangalore

In the result appeal filed by assessee stands partly allowed

ITA 1333/BANG/2014[2007-08]Status: DisposedITAT Bangalore27 Sept 2019AY 2007-08

Bench: Shri J. Sudhakar Reddy & Smt.Beena Pillai

For Appellant: Shri P.C. Khincha, CAFor Respondent: Miss. Neera Malhotra, CIT, DR
Section 10ASection 14ASection 40

…t with eligible unit under section 10A, and therefore, cannot be part for purpose of computing deduction under section 10A of the Act. He placed reliance upon decision of Hon’ble Bombay High Court in case of Zandhu Pharmaceuticals Works Ltd vs CIT reported in 350 ITR 366, wherein, it has been held that, expenses which do not relate to an industrial undertaking/unit under consideration, and they relate to other units or to head office of assessee, such expenses cannot be taken into consideration while computing deduction under the said provisions. He also placed reliance upon decision of Hon’ble Karnataka High Cou…

Asst CIT (Ltu) 2, Mumbai vs. Glenmark Pharmaceuticals Ltd, Mumbai

In the result, the appeal filed by the Revenue stands partly allowed for statistical purpose

ITA 1654/MUM/2016[2010-11]Status: DisposedITAT Mumbai01 Feb 2019AY 2010-11

Bench: Shri Shamim Yahya & Shri Ravish Soodacit (Ltu)-2 M/S. Glenmark Pharmaceuticals Ltd. World Trade Centre Glenmark Huse, Hdo Corporate Centre-1, 29Th Flor Vs. Bldg., Wing A, B.D. Sawant Marg Cuff Parade Chakala, Opp. Western Express Mumbai 400005 High Way, Andheri (E), Mumbai Pan – Aaacg2207L Appellant Respondent

For Appellant: Shi Rajesh DumorFor Respondent: Shri Vijay Mehta &
Section 115JSection 14ASection 41(1)Section 80I

…before the learned CIT(A). 31. The learned CIT(A) noted that the ITAT in assessee’s own case in A.Y. 2009-10 directed AO to give the findings on the basis of the decision of the Hon'ble Bombay High Court in the case of Zandu Pharmaceutical Works Ltd. vs. CIT 350 ITR 366. From this he inferred that the ITAT has not upheld the sand of the Revenue. The learned CIT(A) proceeded to refer to the decision of the Hon'ble Madras High Court in the case of CIT vs. Brakes 161 Taxman 47 and the decision of the Hon'ble Bombay High Court in the case Zandu Pharmaceutical Works Ltd. (supra) and he deleted the addition by conclud…

Shri Suil Prakash, Haryana vs. ACIT, Haryana

In the result, the appeal of the assessee stands allowed

ITA 2104/DEL/2015[2009-10]Status: DisposedITAT Delhi30 Jan 2019AY 2009-10

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastavaassessment Year: 2009-10 Shri Sunil Prakash, Acit, House No. 901, Circle-Ii, Sector-17, Vs Faridabad. Faridabad, Haryana. (Pan: Afvpp5777K) Appellant Respondent Assessee By : Shri Rakesh Gupta, Adv. Department By: Shri Surender Pal, Sr. Dr Date Of Hearing : 20.11.2018 Date Of Pronouncement : 30.01.2019

For Appellant: Shri Rakesh Gupta, AdvFor Respondent: Shri Surender Pal, Sr. DR
Section 143(3)Section 271(1)(c)Section 80I

…rd. It is seen that the assessee’s case is covered by the judgment of the Hon'ble Bombay High Court in wherein the Hon'ble High Court had placed reliance on its earlier judgment in the case of Zandu Pharmaceuticals vs. Commissioner of Income Tax reported in 350 ITR 366 (Bombay) and had arrived at a conclusion that the opinion of the respondent/assessee in not allocating any personal expenses of the head office to the eligible units is a possible view and therefore it could not be said that there was any filing of inaccurate particulars and/or concealment of income on the part of the respondent/assessee warran…

M/S. Rajasthan Renewable Energy Corporation Limited, Jaipur vs. Deputy Commissioner of Income Tax, Circle-6, Jaipur

In the result, the ground of appeal is allowed for statistical purposes

ITA 817/JPR/2018[2013-14]Status: DisposedITAT Jaipur10 Dec 2018AY 2013-14
For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Varinder Mehta (CIT)
Section 251Section 36(1)Section 43BSection 80I

…along with the provisions of section 80IA(1) which provides for profits and gains derived from an eligible business. 43. In this regard, we refer to the decision of the Hon’ble Bombay High Court in case of Zandu Pharmaceuticals Works Ltd. vs. CIT reported in 350 ITR 366 wherein drawing support from the decision of DCIT vs. M/s Rajasthan Renewable Energy Corporation Ltd. Hon’ble Supreme Court in case of CIT v. Sterling Foods reported in 104 Taxman 204, it was held as under: “13. The Supreme Court held that there must be for the application of the words "derived from" a direct nexus between the profits and gains…

Deputy Commissioner of Income Tax, Circle-6, Jaipur vs. M/S. Rajasthan Renewable Energy Corporation Limited, Jaipur

In the result, the ground of appeal is allowed for statistical purposes

ITA 772/JPR/2018[2013-14]Status: DisposedITAT Jaipur10 Dec 2018AY 2013-14
For Appellant: Shri P.C. Parwal (C.A.)For Respondent: Shri Varinder Mehta (CIT)
Section 251Section 36(1)Section 43BSection 80I

…along with the provisions of section 80IA(1) which provides for profits and gains derived from an eligible business. 43. In this regard, we refer to the decision of the Hon’ble Bombay High Court in case of Zandu Pharmaceuticals Works Ltd. vs. CIT reported in 350 ITR 366 wherein drawing support from the decision of DCIT vs. M/s Rajasthan Renewable Energy Corporation Ltd. Hon’ble Supreme Court in case of CIT v. Sterling Foods reported in 104 Taxman 204, it was held as under: “13. The Supreme Court held that there must be for the application of the words "derived from" a direct nexus between the profits and gains…

Pr.Commissioner of Income Tax vs. Montage Enterprises Pvt. Ltd

ITA/892/2016HC Delhi06 Sept 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 153ASection 260ASection 80

…year under consideration, by subletting the technical know-how to an outside party.” 19. Thereafter, the Tribunal referred the judgment passed by the Bombay High Court in Zandu Pharmaceuticals Works Ltd. vs. Commissioner of Income Tax, City-VII [2013] 350 ITR 366 (BOM) holding that the expression “derived from” has been explained by the Supreme Court in Commissioner of Income Tax, Karnataka vs. Sterling Foods, Mangalore (1999) 237 ITR 579 (SC) to mean that there should be a direct nexus between the profits and gains for an industrial undertaking to justify and claim deduction. Secondly, there must…

Pr.Commissioner of Income Tax vs. Montage Enterprises Pvt. Ltd

ITA/895/2016HC Delhi06 Sept 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 153ASection 260ASection 80

…year under consideration, by subletting the technical know-how to an outside party.” 19. Thereafter, the Tribunal referred the judgment passed by the Bombay High Court in Zandu Pharmaceuticals Works Ltd. vs. Commissioner of Income Tax, City-VII [2013] 350 ITR 366 (BOM) holding that the expression “derived from” has been explained by the Supreme Court in Commissioner of Income Tax, Karnataka vs. Sterling Foods, Mangalore (1999) 237 ITR 579 (SC) to mean that there should be a direct nexus between the profits and gains for an industrial undertaking to justify and claim deduction. Secondly, there must…

Pr.Commissioner of Income Tax vs. Montage Enterprises Pvt. Ltd

ITA/893/2016HC Delhi06 Sept 2018

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE CHANDER SHEKHAR

Section 153ASection 260ASection 80

…year under consideration, by subletting the technical know-how to an outside party.” 19. Thereafter, the Tribunal referred the judgment passed by the Bombay High Court in Zandu Pharmaceuticals Works Ltd. vs. Commissioner of Income Tax, City-VII [2013] 350 ITR 366 (BOM) holding that the expression “derived from” has been explained by the Supreme Court in Commissioner of Income Tax, Karnataka vs. Sterling Foods, Mangalore (1999) 237 ITR 579 (SC) to mean that there should be a direct nexus between the profits and gains for an industrial undertaking to justify and claim deduction. Secondly, there must…

DCIT, New Delhi vs. Montage Enterprises (P) Ltd, New Delhi

In the result, the appeal of the assessee is allowed whereas the appeal of the Revenue is dismissed

ITA 556/DEL/2015[2011-12]Status: DisposedITAT Delhi26 Jul 2018AY 2011-12

Bench: : Shri Amit Shukla & Shri L.P. Sahu

For Appellant: 1. On the facts and in the circumstances of the case
Section 115JSection 14ASection 80I

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

M/S. Montage Enterprises Pvt. Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee is allowed whereas the appeal of the Revenue is dismissed

ITA 6963/DEL/2014[2011-12]Status: DisposedITAT Delhi26 Jul 2018AY 2011-12

Bench: : Shri Amit Shukla & Shri L.P. Sahu

For Appellant: 1. On the facts and in the circumstances of the case
Section 115JSection 14ASection 80I

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

DCIT, New Delhi vs. M/S. Montage Enterprises Pvt. Ltd., Delhi

Appeal is dismissed

ITA 4906/DEL/2013[2010-11]Status: DisposedITAT Delhi29 Jun 2018AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmed, Sr.D.RFor Respondent: Shri Ashwani Kr. Aditya Kr., FCA &
Section 115JSection 143(3)Section 80

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

DCIT, New Delhi vs. M/S. Montage Enterprises Pvt. Ltd., Delhi

Appeal is dismissed

ITA 475/DEL/2013[2009-10]Status: DisposedITAT Delhi29 Jun 2018AY 2009-10

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmed, Sr.D.RFor Respondent: Shri Ashwani Kr. Aditya Kr., FCA &
Section 115JSection 143(3)Section 80

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

M/S Montage Enterprises Pvt. Ltd., New Delhi vs. ACIT, New Delhi

Appeal is dismissed

ITA 4426/DEL/2013[2010-11]Status: DisposedITAT Delhi29 Jun 2018AY 2010-11

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmed, Sr.D.RFor Respondent: Shri Ashwani Kr. Aditya Kr., FCA &
Section 115JSection 143(3)Section 80

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

ACIT, New Delhi vs. M/S. Montage Enterprises Pvt. Ltd., New Delhi

Appeal is dismissed

ITA 92/DEL/2012[2008-09]Status: DisposedITAT Delhi29 Jun 2018AY 2008-09

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmed, Sr.D.RFor Respondent: Shri Ashwani Kr. Aditya Kr., FCA &
Section 115JSection 143(3)Section 80

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…

Montage Enterprises Pvt. Ltd., New Delhi vs. DCIT, New Delhi

Appeal is dismissed

ITA 5124/DEL/2011[2008-09]Status: DisposedITAT Delhi29 Jun 2018AY 2008-09

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Atiq Ahmed, Sr.D.RFor Respondent: Shri Ashwani Kr. Aditya Kr., FCA &
Section 115JSection 143(3)Section 80

…ting of the amount to be considered while determining the deduction under section 80 IB in respect of the Jammu unit. The Ld.AR placed is reliance on the decision of Hon'ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. Vs. CIT reported in 259 CTR 253. 5. The revenue in its appeal has raised that the netting of royalty income as directed by the Ld. CIT (A) is not proper. As both these grounds of assessee as well as revenue are interlinked with each other, they are disposed of together for the sake of convenience. 5.1. There is no dispute that the assessee is entitled to the benefit of the prov…