Sun Pharma Laboratories Ltd. Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that deduction under Section 80-IB/80-IE of the Income Tax Act disallowed on loan to employees and bank deposits as such interest income is not income derived from industrial undertaking.
Facts- Vide the present appeal the appellant has contested disallowance of deduction u/s.80IB/ 80-IE in respect of interest on staff advances and statutory/ bank deposits. Notably, AO observed that the Assessee is not entitled for deduction under Section 80-IB/80-IE on loan to employees and bank deposits as such interest income is not income derived from industrial undertaking.
Further, AO also observed that the assessee has incurred various expenditure being accommodation, Business Promotion Expenses, Conference Fees aggregating to Rs.9,81,46,332/- and freebies and gifts paid to Doctors of Rs.2,26,07,758/-. AO has referred to CBDT Circular No. 5/2012 in F.No. 225/142/2012 ITA II, dated 1st August, 2012 wherein it is stated that expenditure incurred for providing freebies of the above nature by pharmaceutical and allied healthcare sector is inadmissible expenditure u/s. 37(1) of the Act. The above addition made by AO was partially upheld by Ld CIT(A).
Conclusion- Amritsar Tribunal in assessee’s own case has disallowed assessee’s claim of deduction under section 80-IB in respect of interest on staff advances & statutory/ bank deposits. Accordingly, following the orders of the Coordinate Benches of the Tribunal in assessee’s own case, we uphold the finding of the learned CIT(A). Thus, the ground raised by the assessee is hereby dismissed.
