ACIT Vs Zydus Lifesciences Limited (ITAT Ahmedabad)
Revenue Fires a 15-Ground Salvo, but Past Precedents & Missing Proof Sink the Appeal — ITAT Applies Consistency u/ss 14A, 35(2AB), 36(1)(va), 40(a)(i) & 92B
A Familiar Battle Returns
The Revenue challenged the order of the CIT(A), which had granted substantial relief to Zydus Lifesciences Ltd. against various additions made in the assessment completed u/s 143(3) r.w.s. 144C. The appeal contained as many as 15 substantive grounds, covering transfer-pricing adjustments, payments to non-residents, research expenditure, registration expenses, depreciation, disallowance u/s 14A, partner’s remuneration, alleged unaccounted foreign-currency receipts & employees’ PF/ESI contributions.
However, the Assessee demonstrated that most of these issues were no longer res integra. They had already been decided in its favour in its own cases for earlier or subsequent AYs. The Revenue could neither point out any material distinction in facts nor dispute the applicability of those precedents.
Corporate Guarantee & Convertible Loans: Consistency Carries the Day
The first three grounds related to a transfer-pricing adjustment of ₹18.95 crore towards corporate guarantee commission. Grounds four & five concerned an adjustment of ₹9.38 crore towards interest on convertible loans advanced to associated enterprises.
The Assessee submitted that the corporate-guarantee issue had already been decided against the Revenue for AYs 2009-10, 2010-11 & 2012-13 to 2015-16. Similarly, the convertible-loan issue stood covered in its favour for AYs 2008-09 to 2010-11 & 2012-13 to 2015-16.
