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

ITA/418/2008

AI Insights

The case involves the Commissioner of Income Tax as the appellant, contesting the decisions made by the Income Tax Appellate Tribunal (ITAT) regarding M/S Glaxo SmithKline Consumer Healthcare Ltd., the respondent. The appellant challenged the ITAT's order which upheld the CIT(A)'s decision on several grounds including the deduction under section 80-IA for machinery installed in an existing factory, the classification of promotional and trade marketing expenses, and the treatment of interest on capital and trial run expenses as well as deductions under section 43B of the Income Tax Act, 1961. The High Court of Punjab and Haryana at Chandigarh decided the appeal by referencing and adhering to its previous rulings on similar issues.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834942 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 05-02-2026
• Assessment Year: misc
• Other Referred Cases: ITA-269-2009, ITA-267-2009, ITA-325-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: ROHIT JAIN; ABHISHEK SHARMA
• Assessee Lawyers: URVASHI DHUGGA; VAIBHAV GUPTA; KAVITA
• Keywords: Capital expenditure; Deduction; Income Tax; Interest on capital; Revenue expenditure; Trial Run Expenses
• Section: 43B; 260A; 80-IA; 80-IA

Judgement Text

" IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** 204 ITA-418-2008 (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 21.09.2007 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 the facts and in the circumstances of the case the ITAT was right in law in upholding the order of the CIT(A) in Printed from counselvise.com DEEPAK BISSYAN 2026.02.09 12:43 I attest to the accuracy and integrity of this document ITA-418-2008 -2- deleting the disallowance of claim for deduction u/s 80-IA of the 1961 Act, in as much as the machineries had been installed in the same existing factory premises, which were in the nature of routine replacements with better capacity? ii. Whether on facts and in the circumstances of the case, the ITAT is right in law in treating the expenditure incurred on promotional and trade marketing as revenue expenditure, when the purpose of the expenditure & its intended reality is to obtain benefit of enduring nature? iii. Whether on the facts and in the circumstances of the case, the ITAT is correct in law in holding that interest on capital borrowed for acquisition of new machinery and overhead expenses incurred during trial run period in expansion of its existing business are expenses of revenue nature? iv. Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in allowing deduction u/s 43B of the 1961 Act for tax duty etc. on payment basis before incurring the liability to pay such amounts? 3. Learned counsel for the parties are ad idem that questions No.1 and 3 stand answered by order dated 19.01.2026 passed by this Court in ITA- 269-2009, question No.2 by order dated 04.02.2026 in ITA-267-2009 and question No.4 by order dated 04.02.2026 passed in ITA-325-2016. 4. The questions raised by appellant are answered in terms of aforesaid orders of this Court. Printed from counselvise.com DEEPAK BISSYAN 2026.02.09 12:43 I attest to the accuracy and integrity of this document ITA-418-2008 -3- 5. 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 "