Sun Pharma Laboratories Ltd Vs DCIT (ITAT Ahmedabad)
Summary: The ITAT Ahmedabad disposed of cross appeals filed by Sun Pharma Laboratories Ltd. and the Revenue arising from the order dated 01.08.2024 of the CIT(A), NFAC, for AY 2016-17. The assessee had filed its return declaring total income of Rs.447,76,25,270 under the normal provisions and book profit of Rs.495,02,76,436 under section 115JB. The assessment under section 143(3) read with section 92CA(3) resulted in taxable income of Rs.1,400,68,90,290 and book profit of Rs.2,387,08,38,503.
On the assessee’s appeal, the Tribunal dismissed the claim for section 80-IB/80-IE deduction on interest from staff advances and statutory/bank deposits of Rs.4,81,888, following consistent decisions in the assessee’s own case. On the section 14A issue involving disallowance of Rs.22,33,819 against exempt interest income of Rs.2,98,76,675 from tax-free bonds, the Tribunal directed the Assessing Officer to verify whether sufficient own interest-free funds were available. If sufficient own funds were available, no interest disallowance under Rule 8D(2)(ii) was to be made. Administrative expenditure was to be restricted to 0.5% of the average value of investments yielding exempt income, after credit for the suo motu disallowance, making the ground allowed for statistical purposes. The Tribunal accordingly followed the principle concerning section 14A read with Rule 8D.
