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

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, we hold that the Tax Authorities were not justified in apportioning R & D expenditure and ESOP cost to the units which claimed exemption u/s 10B, 80IB and 80IC of the Act

ITA 1846/HYD/2017[2010-11]Status: DisposedITAT Hyderabad08 Jun 2018AY 2010-11

Bench: Shri D. Manmohan & Shri S. Rifaur Rahman

For Appellant: Shri S.P. ChidambaramFor Respondent: Shri J. Siri Kumar, CIT-DR
Section 10ASection 10BSection 143(3)Section 147Section 148

…e R&D work carried out in the IPDO and the products manufactured in the other units, the question of apportioning the R&D expenditure to these units does not arise. In this regard, we rely on the following cases: • Zandu Pharmaceuticals Works Limited vs. CIT (350 ITR 366) held that only expenditure directly relating to such eligible activity would be deductible. R&D expenses of the head office cannot by itself be understood as proportionately deductible, unless there is evidence to show nexus as between the eligible activity and such research. • Bush Boake Allen (India) Pvt Ltd vs. ACIT (2005) 273 ITR 152 (Mad) h…

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, we hold that the Tax Authorities were not justified in apportioning R & D expenditure and ESOP cost to the units which claimed exemption u/s 10B, 80IB and 80IC of the Act

ITA 1845/HYD/2017[2009-10]Status: DisposedITAT Hyderabad08 Jun 2018AY 2009-10

Bench: Shri D. Manmohan & Shri S. Rifaur Rahman

For Appellant: Shri S.P. ChidambaramFor Respondent: Shri J. Siri Kumar, CIT-DR
Section 10ASection 10BSection 143(3)Section 147Section 148

…e R&D work carried out in the IPDO and the products manufactured in the other units, the question of apportioning the R&D expenditure to these units does not arise. In this regard, we rely on the following cases: • Zandu Pharmaceuticals Works Limited vs. CIT (350 ITR 366) held that only expenditure directly relating to such eligible activity would be deductible. R&D expenses of the head office cannot by itself be understood as proportionately deductible, unless there is evidence to show nexus as between the eligible activity and such research. • Bush Boake Allen (India) Pvt Ltd vs. ACIT (2005) 273 ITR 152 (Mad) h…

Dr.Reddy'S Laboratories Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-17(1), Hyderabad

In the result, we hold that the Tax Authorities were not justified in apportioning R & D expenditure and ESOP cost to the units which claimed exemption u/s 10B, 80IB and 80IC of the Act

ITA 1844/HYD/2017[2008-09]Status: DisposedITAT Hyderabad08 Jun 2018AY 2008-09

Bench: Shri D. Manmohan & Shri S. Rifaur Rahman

For Appellant: Shri S.P. ChidambaramFor Respondent: Shri J. Siri Kumar, CIT-DR
Section 10ASection 10BSection 143(3)Section 147Section 148

…e R&D work carried out in the IPDO and the products manufactured in the other units, the question of apportioning the R&D expenditure to these units does not arise. In this regard, we rely on the following cases: • Zandu Pharmaceuticals Works Limited vs. CIT (350 ITR 366) held that only expenditure directly relating to such eligible activity would be deductible. R&D expenses of the head office cannot by itself be understood as proportionately deductible, unless there is evidence to show nexus as between the eligible activity and such research. • Bush Boake Allen (India) Pvt Ltd vs. ACIT (2005) 273 ITR 152 (Mad) h…

Phoenix Lamps Ltd., Noida vs. JCIT, Noida

In the result, the appeal of the assessee stands partly

ITA 155/DEL/2014[2005-06]Status: DisposedITAT Delhi24 Oct 2017AY 2005-06

Bench: Sudhanshu Srivastava & Shri Prashant Maharishi

For Appellant: Shri Shashwat Bajpai, Adv. & Shri Sharad AgarwalFor Respondent: Smt. Paramita Tripathy, CIT DR
Section 271(1)(c)Section 3Section 50CSection 80I

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘F’ NEW DELHI BEFORE SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No. 155/Del /2014 Assessment Year: 2005-06 Pheonix Lamps Ltd., Joint Commissioner (Formerly Halonix Ltd.,) of Income Tax, vs 59Am NSEZ, Phase-II, Noida, Range-1, Noida. Noida. (PAN: AABCP7718G) (Appellant) (Respondent) Appellant by: Shri Shashwat Bajpai, Adv. & Shri Sharad Agarwal Respondent by: Smt. Paramita Tripathy, CIT DR Date of Hearing : 26.07.2017 Date of Pronouncement: 24.10.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. This appeal has been…

M/S. Teradata India Private Limited, Gurgaon vs. DCIT, Gurgaon

In the result ground No. 6 of the appeal of the assessee is allowed with above direction

ITA 1833/DEL/2014[2009-10]Status: DisposedITAT Delhi11 May 2017AY 2009-10

Bench: Shri I. C. Sudhir & Shri Prashant Maharishiteradata India Pvt. Ltd, Vs. Dcit, Unit No. 304, 3Rd Floor, Tower- Circle-Ii, 4A, Gurgaon Gurgaon Pan: Aacct6715A (Appellant) (Respondent)

For Appellant: Shri Percy PardiwalaFor Respondent: Shri Neeraj Kumar
Section 10ASection 143(3)(ii)Section 92C

…y during assessment proceedings. He referred to para No. 8.2 of the order of Ld. dispute resolution panel to substantiate his claim. He also relied upon the host of judicial precedents to support its claim, such as a. Zandu Pharmaceutical works Ltd versus CIT 350 ITR 366 (BOM) (para No. 9) to submit that while computing the profits and gains of the concern undertaking only expenses relating thereto can be deducted. It was further held that the expenses attributable to any other unit or the head office expenses which have no relevance to the industrial undertaking cannot be deducted in respect of the said undertak…

Jai Corp Ltd, Mumbai vs. DCIT Cen Cir 39, Mumbai

In the result, both assessee’s and revenue’s appeals may be treated as partly allowed for statistical purposes

ITA 4837/MUM/2014[2010-11]Status: DisposedITAT Mumbai16 Mar 2016AY 2010-11

Bench: Shri Sanjay Garg & Shri Ashwani Tanejaassessment Year: 2010-11 M/S. Jai Corp Ltd. Dcit, Central Circle-39, 11-B Mittal Tower, B-Wing, बनाम/ R.No. 32(1), Gr. Fl. Nariman Point, Aayakar Bhavan, Vs. Mumbai- 400021 M.K. Road, Mumbai-400020 (Assessee) (Revenue) P.A. No.Aaacj2591A Assessment Year: 2010-11 Dcit, Central Circle-39, M/S. Jai Corp Ltd. R.No. 32(1), Gr. Fl. Aayakar बनाम/ 11-B Mittal Tower, B- Bhavan, Wing, Vs. M.K. Road, Nariman Point, Mumbai-400020 Mumbai- 400021 (Revenue) (Assessee) P.A. No.Aaacj2591A "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta (Ar) राज"व क" ओर से / Revenue By Shri K. Mohandas, (Dr)

Section 10BSection 143(3)Section 14A(2)Section 234ASection 801BSection 80I

…itted a chart showing a working of head office expenses allocable to 10B and 80IB units as was done by the Ld. CIT(A). In support of his arguments, he relied upon the judgment of Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. v. CIT 350 ITR 366, for the proposition that while computing profit and gains for an undertaking, only expenses relating thereto can be deducted. 4.6. On the other hand, Ld. DR opposed the submissions of the Ld. Counsel and submitted that allocation of head office expenses as done by the Ld. CIT(A) is in accordance with law and facts and no interference is require…

Jai Corp Ltd, Mumbai vs. DCIT Cen Cir 39, Mumbai

In the result, both assessee’s and revenue’s appeals may be treated as partly allowed for statistical purposes

ITA 4836/MUM/2014[2007-08]Status: DisposedITAT Mumbai16 Mar 2016AY 2007-08

Bench: Shri Sanjay Garg & Shri Ashwani Tanejaassessment Year: 2010-11 M/S. Jai Corp Ltd. Dcit, Central Circle-39, 11-B Mittal Tower, B-Wing, बनाम/ R.No. 32(1), Gr. Fl. Nariman Point, Aayakar Bhavan, Vs. Mumbai- 400021 M.K. Road, Mumbai-400020 (Assessee) (Revenue) P.A. No.Aaacj2591A Assessment Year: 2010-11 Dcit, Central Circle-39, M/S. Jai Corp Ltd. R.No. 32(1), Gr. Fl. Aayakar बनाम/ 11-B Mittal Tower, B- Bhavan, Wing, Vs. M.K. Road, Nariman Point, Mumbai-400020 Mumbai- 400021 (Revenue) (Assessee) P.A. No.Aaacj2591A "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta (Ar) राज"व क" ओर से / Revenue By Shri K. Mohandas, (Dr)

Section 10BSection 143(3)Section 14A(2)Section 234ASection 801BSection 80I

…itted a chart showing a working of head office expenses allocable to 10B and 80IB units as was done by the Ld. CIT(A). In support of his arguments, he relied upon the judgment of Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. v. CIT 350 ITR 366, for the proposition that while computing profit and gains for an undertaking, only expenses relating thereto can be deducted. 4.6. On the other hand, Ld. DR opposed the submissions of the Ld. Counsel and submitted that allocation of head office expenses as done by the Ld. CIT(A) is in accordance with law and facts and no interference is require…

ACIT CC 39, Mumbai vs. Jai Corp. Ltd., Mumbai

In the result, both assessee’s and revenue’s appeals may be treated as partly allowed for statistical purposes

ITA 4737/MUM/2014[2010-11]Status: DisposedITAT Mumbai16 Mar 2016AY 2010-11

Bench: Shri Sanjay Garg & Shri Ashwani Tanejaassessment Year: 2010-11 M/S. Jai Corp Ltd. Dcit, Central Circle-39, 11-B Mittal Tower, B-Wing, बनाम/ R.No. 32(1), Gr. Fl. Nariman Point, Aayakar Bhavan, Vs. Mumbai- 400021 M.K. Road, Mumbai-400020 (Assessee) (Revenue) P.A. No.Aaacj2591A Assessment Year: 2010-11 Dcit, Central Circle-39, M/S. Jai Corp Ltd. R.No. 32(1), Gr. Fl. Aayakar बनाम/ 11-B Mittal Tower, B- Bhavan, Wing, Vs. M.K. Road, Nariman Point, Mumbai-400020 Mumbai- 400021 (Revenue) (Assessee) P.A. No.Aaacj2591A "नधा"रती क" ओर से / Assessee By Shri Vijay Mehta (Ar) राज"व क" ओर से / Revenue By Shri K. Mohandas, (Dr)

Section 10BSection 143(3)Section 14A(2)Section 234ASection 801BSection 80I

…itted a chart showing a working of head office expenses allocable to 10B and 80IB units as was done by the Ld. CIT(A). In support of his arguments, he relied upon the judgment of Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd. v. CIT 350 ITR 366, for the proposition that while computing profit and gains for an undertaking, only expenses relating thereto can be deducted. 4.6. On the other hand, Ld. DR opposed the submissions of the Ld. Counsel and submitted that allocation of head office expenses as done by the Ld. CIT(A) is in accordance with law and facts and no interference is require…