Apportionment of expense on R&D and ESOP having no nexus with products manufactured in exempted units not justified

Dr. Reddy’s Laboratories Limited Vs DCIT (ITAT Hyderabad)

The case of the assessee, all through, was that R & D expenditure was incurred by the assessee in a separate unit known as ‘IPDO’, which is meant for carrying on R & D. It is also not in dispute that formulations / products arising out of it may or may not be utilised in the special units wherein the assessee is eligible for deduction / It is not controverted that formulations / products arising out of it can be sold in the open market and need not necessarily be utilised in the existing special units. The Honâ

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