ACIT Vs Aurobindo Pharma Ltd (ITAT Hyderabad)
ITAT Hyderabad held that weighted deduction u/s 35(2AB) of the Income Tax Act in respect of clinical trials expenses incurred outside approved R&D facilities is allowable post approval by prescribed authority.
Facts-
Vide the present appeal, the main issue contested is additions made in respect of the Corporate Guarantee commission, interest on receivables and disallowance of weighted deduction claimed under section 35(2AB) of the Income Tax Act, 1961.
Conclusion-
With regard to additions made in respect of the Corporate Guarantee commission it is held that ALP on account of corporate guarantee at the 0.50% on the amount guaranteed is proper commission.
With regard to weighted deduction claimed u/s 35(2AB) it is held that when once the clinical trial expenses incurred outside the approved R&D facilities, were approved by the prescribed authority the assessee is entitled to claim deduction under section 35(2AB) of the Act.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
Aggrieved by the order dated 29.03.2023 passed by the learned Commissioner of Income Tax (Appeals)- 11, Hyderabad (“Ld. CIT(A)”), in the case of Aurobindo Pharma Ltd (“the assessee”) for the assessment year 2016-17, both the Revenue and the assessee preferred these appeals.
