Case Law Details
DCIT Vs Macleods Pharmaceuticals Ltd (ITAT Mumbai)
ITAT Mumbai held that disallowance for deduction under section 80IB and 80IC of the Income Tax Act corresponding to the allocation of R&D expenditure is deleted.
Facts- Post search and seizure, various additions/disallowances including (i) disallowance of expenses on promotional items including free gifts to doctors/medical representatives (ii) proportionate withdrawal of deduction under section 80IB & 80IC of the Act for apportionment of research and development expenses and (iii) withdrawal of deduction u/s 80IC for inter unit transfer of material were made.
Aggrieved, the assessee filed appeal before CIT(A) , who vide impugned order deleted the disallowance of promotional items/free gifts, etc. in view of the order of the ITAT passed in appeals arising from original assessment proceedings (in order passed u/s. 143(3) of the Act) but upheld the disallowance of deduction u/s. 80IB / 80IC for allocation of research and development expenses and as well as disallowance of deduction u/s 80IC for inter unit transfer of material. Aggrieved by the above finding of the Ld.CIT(A), both the parties are in appeal before the ITAT.
Conclusion- On perusal of the list of products manufactured in eligible units and drug under development and R & D units, we find that products manufactured under the units eligible for 801B and 80IC units are totally unrelated with the product under development in R&D units.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
