Commissioner of Income Tax V. Glaxo SmithKline Consumer Healthcare Ltd.

ITA/266/2009

AI Insights

The case involves the Commissioner of Income Tax as the appellant and M/S Glaxo SmithKline Consumer Healthcare Ltd. as the respondent. The appellant challenged the ITAT's decision regarding the classification of certain expenditures and the application of specific deductions under the Income Tax Act, 1961. The questions pertained to whether product development expenditures should be treated as revenue expenditures, the inclusion of Excise Duty in the computation of 'total turnover' for deductions under section 80HHC, and the eligibility for deductions under section 80-I for machinery installed in an expanded factory. The High Court referenced decisions from the Supreme Court and previous rulings to affirm the ITAT's decisions.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 834708 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 05-02-2026
• Assessment Year: misc
• Other Referred Cases: CIT Vs. Lakshmi Machine Works
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ROHIT JAIN; ABHISHEK SHARMA
• Assessee Lawyers: URVASHI DHUGGA; VAIBHAV GUPTA; KAVITA
• Keywords: Deduction; Excise Duty; Factory Expansion; Machinery Installation; Product Development; Revenue expenditure; Total Turnover
• Section: 80HHC; 260A; 80-I

Judgement Text

" IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** 204 ITA-266-2009 (O&M) Date of Decision: 05.02.2026 COMMISSIONER OF INCOME TAX ...Appellant Vs. M/S GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD. …Respondents CORAM:- HON'BLE MR. JUSTICE JAGMOHAN BANSAL HON'BLE MR. JUSTICE AMARINDER SINGH GREWAL Present:- Ms. Urvashi Dhugga, Sr. Standing Counsel with Mr. Vaibhav Gupta, Jr. Standing Counsel and Ms. Kavita, Advocate for Income Tax Mr. Rohit Jain, Advocate (through V.C.) and Mr. Abhishek Sharma, Advocate for the assessee *** JAGMOHAN BANSAL, J. (ORAL) 1. The appellant through instant appeal under Section 260A of the Income Tax Act, 1961 (for short ‘1961 Act’) is seeking setting aside of order dated 21.03.2007 passed by Income Tax Appellate Tribunal, Chandigarh (for short ‘ITAT’). 2. The appellant has raised following questions for adjudication by this Court:- i. Whether on facts and in the circumstances of the case, the ITAT is right in law in treating the expenditure incurred on product development as revenue expenditure, when the purpose of the expenditure & its intended reality is to obtain benefit of enduring nature? ii. Whether on the facts and in the circumstances of the case, the ITAT was right in holding that Excise Duty will not form part Printed from counselvise.com DEEPAK BISSYAN 2026.02.09 12:43 I attest to the accuracy and integrity of this document ITA-266-2009 -2 - of \"total turnover\" while computing deduction u/s 80HHC? iii. Whether on the facts and in the circumstances of the case the ITAT was right in law in allowing the deduction u/s 80-I of the 1961 Act, in as much as the machinery had been installed in the same existing factory premises, which is an expansion of the existing factory? 3. Learned counsel for the respondent submits that question No.1 stands answered by this Court vide order dated 04.02.2026 passed in ITA- 267-2009. Question No.2 stands settled in favour of assessee vide order dated 27.01.2026 passed by Hon’ble Supreme Court in “CIT Vs. Lakshmi Machine Works”, [2007] 160 Taxman 404 (SC). Question No.3 also stands answered in favour of assessee vide order dated 27.11.2025 passed by this Court in ITA-269-2009. 4. Learned counsel for appellant expressed her inability to controvert aforesaid statement. 5. In the wake of statement of both sides, questions raised by appellant are answered in view of orders of this Court as well as Hon’ble Supreme Court as noticed hereinabove. 6. Pending application(s), if any, stands disposed of. (JAGMOHAN BANSAL) JUDGE (AMARINDER SINGH GREWAL) JUDGE February 05, 2026 Deepak DPA Whether Speaking/reasoned Yes/No Whether Reportable Yes/No Printed from counselvise.com DEEPAK BISSYAN 2026.02.09 12:43 I attest to the accuracy and integrity of this document "