The Asstt. Commissioner of Income Tax, Circle-4(1)(2), Ahmedabad V. M/s. Troikaa Pharmaceuticlas Limited, Ahmedabad

ITA 1325/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3641 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-03-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KARAN SHAH A RS
• Keywords: Capital asset; Depreciation; Retrospective amendment; Question of law; Reasonable cause; Corroborative evidences; Revenue expenditure; Capital expenditure; TDS
• Section: 143(3); 195; 9(1); 9(1); 9(1); 13

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV , VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMB ER ./ I.T.A. NO. 1325/AHD/2017 WITH CROSS OBJECTION NO.31/AHD/2018 ( ASSESSMENT YEARS : 2010-11) A.C.I.T. CIRCLE-4(1)(2), AHMEDABAD / VS. M/S. TROIKAA PHARMACEUTICALS LTD. COMMERCE HOUSE, OPP. RAJVANSH APARTMENT, JUDGES BUNGLOW ROAD, AHMEDABAD-380015 ./ ./ PAN/GIR NO. : AABCD9176A ( APPELLANT / RESPONDENT ) .. ( RESPONDENT / CROSS OBJECTOR ) / REVENUE BY : SHRI VINOD TANWANI, SR.D.R. / ASSESSEE BY : SHRI DHIREN SHAH & SHRI KARAN SHAH, A.RS. DATE OF HEARING 02/03/2020 ! / DATE OF PRONOUNCEMENT 04/03/2020 / O R D E R PER T. S. KAPOOR - AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A)-8, AHMEDABAD, DATED 20/03/2017 RELAT ING TO ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: 1) 'WHETHER THE ID. C1T(A) IS RIGHT IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 74,50,738/- MADE BY THE A.O . OUT OF ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 2 - DEDUCTION CLAIMED BY THE ASSESSEE U/S. 35(2AB) OF T HE I. T. ACT IN RESPECT OF RESEARCH ARID DEVELOPMENT EXPENDITURE.' 2) 'WHETHER THE LD. C1T(A) IS RIGHT IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 5,03,066/- MADE BY THE A.O. ON ACCOUNT OF DEPRECIATION ON ELECTRIC INSTALLATION.' 3) 'WHETHER THE LD. CIT(A) IS RIGHT IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 3,72,824/- MADE BY THE A.O. ON ACCOUNT OF PRIOR PERIOD EXPENSES.' 4) 'WHETHER THE LD. O1T(A) IS RIGHT IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 40,01,829/- MADE BY THE A.O . ON ACCOUNT OF FOREIGN COMMISSION EXPENSES.' 5) 'WHETHER THE LD. CIT(A) IS RIGHT IN LAW AND O N FACTS IN ALLOWING THE PRODUCT REGISTRATION FEE OF RS. 34,42,638/- AND PROFESSIONAL FEE ON PATENT OF RS. 11,48,325/-.' 3. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION TO T HE APPEAL FILED BY THE REVENUE, HOWEVER, FROM THE GROUNDS OF CROSS OBJECTION, IT IS OBSERVED THAT CO IS MERELY SUPPORTIVE OF LEARNED CI T(A)S ORDER. 4. THE LEARNED DR, AT THE OUTSET, RELIED UPON THE O RDER OF AO. 5. THE LEARNED AR, ON THE OTHER HAND, INVITED OUR A TTENTION TO A CHART WHEREIN THE GROUNDWISE ARGUMENTS OF THE ASSES SEE WERE REPRODUCED AND LEARNED AR SUBMITTED THAT THE LEARNE D CIT(A) HAS RIGHTLY ALLOWED GROUND NO.1 IN RESPECT OF EXPENSES INCURRED OUTSIDE THE APPROVED IN-HOUSE R&D CENTER FOLLOWING THE JUDG MENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CADILA HEALTHCARE LTD. [2013] 31 TAXMANN.COM 300 (GUJ). 6. AS REGARDS GROUND NO.2 REGARDING DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON ELECTRIC INSTALLATIONS, THE LEARNED AR SUBMITTED THAT THE LEARNED CIT(A) HAS RIGHTLY ALLOWED RELIEF TO TH E ASSESSEE BY FOLLOWING HIS OWN ORDER FOR AY 2005-06 & 2009-10. 7. AS REGARDS THE THIRD GROUND RELATING TO PRIOR PE RIOD EXPENSES, THE LEARNED AR SUBMITTED THAT THE LEARNED CIT(A) HA S RIGHTLY ALLOWED ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 3 - RELIEF TO THE ASSESSEE BY FOLLOWING THE CASE OF CIT VS. MAHANAGAR GAS LTD. [2014] 42 TAXMANN.COM 40 (BOM.) . THE LEARNED AR FURTHER SUBMITTED THAT THE EXPENSES THOUGH WERE CLASSIFIED UNDER THE HEAD PRIOR PERIOD EXPENSES BUT SUCH EXPENDITURES HAD C RYSTALIZED DURING THE YEAR AND THEREFORE, FOLLOWING THE RATIO OF JUDG MENT IN CASE OF MAHANAGAR GAS LTD. (SUPRA) . THE LEARNED CIT(A) HAS RIGHTLY ALLOWED RELIEF TO THE ASSESSEE. 8. AS REGARDS THE DISALLOWANCE ON ACCOUNT OF FOREIG N COMMISSION EXPENSES, LEARNED AR SUBMITTED THAT LEARNED CIT(A) HAS FOLLOWED HIS OWN ORDER FOR AY 2009-10 AND THE SAID ORDER OF LEAR NED CIT(A) HAS BEEN CONFIRMED BY THE HONBLE TRIBUNAL VIDE ORDER D ATED 16 TH AUGUST, 2016 AND THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY DELETED THE SAME. 9. COMING TO LAST GROUND OF APPEAL RELATING TO DISA LLOWANCE OF REGISTRATION FEE AND PROFESSIONAL FEE, THE LEARNED AR AGAIN SUBMITTED THAT SIMILAR ISSUE WAS DECIDED BY HONBLE TRIBUNAL IN ITS OWN CASE IN ITA NO.2028/AHD/2013 ORDER DATED 16.08.2016 WHERE T HE HONBLE TRIBUNAL RELYING ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TORRENT PHARMACEUTICALS LTD. [2013] 29 TAXM ANN.COM 405 (GUJ) HAD HELD THAT REGISTRATION FEE AND PROFESSIONAL FEE WERE REVENUE EXPENDITURE. 10. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. 11. WE FIND THAT THE FIRST ISSUE RAISED BY REVENUE IS REGARDING THE DEDUCTION UNDER S.35(2AB) OF THE ACT WHICH THE AO H AD DISALLOWED AS THE ASSESSEE HAD CARRIED OUT CERTAIN EXPENDITURES O UTSIDE THE IN-HOUSE R&D CENTER. THE LEARNED CIT(A) HAS HOWEVER ALLOWED RELIEF TO THE ASSESSEE KEEPING IN VIEW THE JUDGMENT OF HONBLE GU JARAT HIGH COURT IN THE CASE OF CADILA HEALTHCARE LTD. (SUPRA) WHERE THE HONBLE COURT HAD HELD THAT CLINICAL TRIALS CONDUCTED OUTSIDE APP ROVED FACILITY WERE ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 4 - ELIGIBLE FOR EXEMPTION UNDER S.35(2AB) OF THE ACT. THE JUDGMENT OF HONBLE GUJARAT HIGH COURT AS REPRODUCED BY THE CIT (A) ALONG WITH HIS FINDING IS REPRODUCED BELOW: 5.3 AS THE FACTS AND CIRCUMSTANCES OF THE PRESENT CAASE OF THE APPELLANT ARE COVERED BY THE JUDGMENT OF HONBLE HI GH COURT OF GUJARAT IN THE CASE OF CADILA HEALTHCARE LTD. (SUPRA), THE RELEVANT PORTION OF THE ORDER OF HONBLE HIGH COURT IS QUOTE D AS UNDER: ' HELD -SECTION 35(2AB) PROVIDES FOR DEDUCTION TO A COMPAN Y ENGAGED IN BUSINESS OF BIOTECHNOLOGY OR IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING NOTIFIED BY THE BOARD TOWARDS EXPENDITURE OF SCIENTIFIC RESEARCH DEVELOPMENT FACI LITY APPROVED BY THE PRESCRIBED AUTHORITY. [PARA 14] -THE EXPLANATION TO SECTION 35(2AB)(1) PROVIDES THA T FOR THE PURPOSE OF SAID CLAUSE, I.E. CLAUSE (I) OF SECTION 35(2AD), EXPENDITURE ON SCIENTIFIC RESEARCH IN RELATION TO D RUGS AND PHARMACEUTICAL SHALL INCLUDE EXPENDITURE INCURRED O N CLINICAL DRUG TRIAL, OBTAINING APPROVAL FROM ANY REGULATORY AUTHORITY UNDER THE CENTRAL STATE OR PROVINCIAL ACT AND FILIN G AN APPLICATION FOR A PATENT UNDER THE PATENTS ACT, 197 0. [PARA 15] -THE WHOLE IDEA APPEARS TO BE TO GIVE ENCOURAGEMENT TO SCIENTIFIC RESEARCH. BY THE VERY NATURE OF THINGS, CLINICAL TRIALS MAY NOT ALWAYS BE POSSIBLE TO BE CONDUCTED IN CLOSE D LABORATORY OR IN SIMILAR IN-HOUSE FACILITY PROVIDED BY THE ASS ESSEE AND APPROVED BY THE PRESCRIBED AUTHORITY. BEFORE A PHAR MACEUTICAL DRUG COULD HE PUT IN THE MARKET, THE REGULATORY AUT HORITIES WOULD INSIST ON STRICT TESTS AND RESEARCH ON ALL POSSIBLE ASPECTS, SUCH AS POSSIBLE REACTIONS, EFFECT OF THE DRUG AND SO ON . -EXTENSIVE CLINICAL TRIALS, THEREFORE, WOULD BE AN INTRINSIC PART OF DEVELOPMENT OF ANY SUCH NEW PHARMACEUTICAL DRUG. IT CANNOT BE IMAGINED THAT SUCH CLINICAL TRIAL CAN BE CARRIED OU T ONLY IN THE LABORATORY OF THE PHARMACEUTICAL COMPANY. IF ONE GI VES SUCH RESTRICTED MEANING TO THE TERM EXPENDITURE INCURRED ON IN HOUSE RESEARCH AND DEVELOPMENT FACILITY, ONE WOULD ON ONE HAND BE COMPLETELY DILUTING THE DEDUCTION ENVISAGED UNDER S UB-SECTION (2AB) OF SECTION 35 AND ON THE OTHER, MAKING THE EX PLANATION QUITE MEANINGLESS. -AS NOTICED EARLIER THAT FOR THE PURPOSE OF THE SAI D CLAUSE IN RELATION TO DRUG AND PHARMACEUTICAL, THE EXPENDITUR E ON SCIENTIFIC RESEARCH HAS LO INCLUDE THE EXPENDITURE INCURRED ON CLINICAL TRIALS IN OBTAINING APPROVALS FROM ANY REG ULATORY AUTHORITY OR IN FILING AN APPLICATION FOR GRANT OF PATENT. THE ACTIVITIES OF OBTAINING APPROVAL OF THE AUTHORITY A ND FILING OF AN APPLICATION FOR PATENT NECESSARILY SHALL HAVE TO BE OUTSIDE THE IN- HOUSE RESEARCH FACILITY. THUS THE RESTRICTED MEANIN G SUGGESTED BY ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 5 - THE REVENUE WOULD COMPLETELY MAKE THE EXPLANATION Q UITE MEANINGLESS. FOR THE SCIENTIFIC RESEARCH IN RELATIO N TO DRUGS AND PHARMACEUTICAL MADE FOR ITS OWN PECULIAR REQUIREMEN TS, THE LEGISLATURE APPEARS TO HAVE ADDED SUCH AN EXPLANATI ON. [PARA 16] -THEREFORE, THE TRIBUNAL COMMITTED NO ERROR. MERELY BECAUSE THE PRESCRIBED AUTHORITY SEGREGATED THE EXPENDITURE INT O TWO PARTS, NAMELY, THOSE INCURRED WITHIN THE IN-HOUSE FACILITY AND THOSE WERE INCURRED OUTSIDE, BY ITSELF WOULD NOT BE, SUFF ICIENT LO DENY THE BENEFIT TO THE ASSESSEE UNDER SECTION 35(2AB). IT IS NOT AS IF THAT THE SAID AUTHORITY WAS ADDRESSING THE ISSUE FO R DEDUCTION UNDER SECTION 35(2AB) IN RELATION TO THE QUESTION O N HAND. THE CERTIFICATE ISSUED WAS ONLY FOR THE PURPOSE OF LIST ING THE TOTAL EXPENDITURE UNDER THE RULES. THEREFORE, NO QUESTION OF LAW ARISES. ' 5.4 IN VIEW OF THE ABOVE DISCUSSION AND THE RATIO L AID DOWN BY THE HONBLE HIGH COURT OF GUJARAT, THE AO IS DIRECTED T O ALLOW THE WEIGHTED DEDUCTION OF RS.74,50,738/- INCURRED BY TH E APPELLANT OUTSIDE THE APPROVED FACILITY. ACCORDINGLY, GROUND NO.1 OF THE APPEAL IS ALLOWED. 12. THE REVENUE WAS NOT ABLE TO CONTROVERT THE FIND INGS OF LEARNED CIT(A) WHO HAD RELIED ON THE JUDGMENT OF GUJARAT HI GH COURT AND ALLOWED RELIEF TO THE ASSESSEE. THEREFORE, FINDING NO INFIRMITY IN THE ORDER OF LEARNED CIT(A), GROUND NO.1 OF REVENUES A PPEAL IS DISMISSED. 13. NOW COMING TO GROUND NO.2 REGARDING DEPRECIATIO N ON ELECTRICAL ITEMS, WE FIND THAT AO HAD RESTRICTED THE DEPRECIAT ION TO 15% INSTEAD OF 25% BY HOLDING THAT ELECTRICAL FITTINGS ARE ELIG IBLE FOR DEPRECIATION AT A PARTICULAR RATE PRESCRIBED UNDER THE RULES. H OWEVER, BEFORE THE LEARNED CIT(A), THE ASSESSEE DEMONSTRATED THAT ELEC TRICAL INSTALLATIONS WERE CONNECTED TO PLANT AND MACHINERY AND WERE PART S OF PLANT AND MACHINERY ITSELF. IT WAS ALSO SUBMITTED TO LEARNED CIT(A) THAT SIMILAR DISALLOWANCE WAS MADE IN THE CASE OF ASSESSEE IN AY 2009-10 WHICH THE LEARNED CIT(A) HAD DELETED. THE LEARNED CIT(A) HAS ALSO ALLOWED RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF HO NBLE ITAT IN THE CASE OF ASSESSEE ITSELF FOR AYS. 2005-06 & 2009-10. FOR THE SAKE OF COMPLETENESS, THE FINDINGS OF LEARNED CIT(A) ARE RE PRODUCED BELOW: ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 6 - 6.2 DURING THE APPELLATE PROCEEDINGS, THE AR OF TH E APPELLANT FILED A WRITTEN SUBMISSION ON THIS ISSUE AS UNDER: 'II. DISALLOWANCE OF DEPRECIATION CLAIMED ON ELECTR IC INSTALLATION - RS.5,03,066/- HERE, IT IS IMPORTANT TO TAKE NOTE OF THE FINDINGS GIVEN BY THE HONBLE ITAT IN ITS ORDER FOR ASST. YEAR 2005-06 ON PAGE NO. 3 IN PARA 5 US UNDER: 'WE FIND THAT THE LOWER AUTHORITIES HAVE DECIDED TH E ISSUE BY MERELY LOOKING AT THE NOMENCLATURE GIVEN TO THE ASS ET WITHOUT VERIFYING THE ACTUAL DETAILS OF THE ASSET AND THE N ATURE OF THE ASSETS. IN OUR CONSIDERED OPINION THE ELECTRICAL F ITTINGS WHICH FORMS INTEGRAL PART OF THE PLANT A MACHINERY AND TH OSE ELECTRICAL FITTINGS WHICH ARE USED ALONG WITH THE PLANT & MACH INERY AND CANNOT BE USED SEPARATELY AS SUCH ARE PART OF PLANT A MACHINERY AND DEPRECIATION @ 25% IS ALLOWABLE IN RESPECT OF T HE SAME. HOWEVER, IN CASE OF THOSE ELECTRICAL FITTINGS WHICH ARE INDEPENDENTLY USED A ELECTRICAL FITTINGS IN RESPECT OF THOSE ASSETS DEPRECIATION @ 15% IS ONLY ALLOWABLE '. 5. IT IS SUBMITTED THAT THE ELECTRIC INSTALLATIONS ARE USED ALONG WITH THE PLANT & MACHINERY AND ARE NOT CAPABLE OF BEING USED SEPARATELY AS SUCH. IT IS PART AND PARCEL OF PLANT & MACHINERY. T HE DEPRECIATION ON ELECTRIC INSTALLATION IS ALLOWABLE @ 15% FURTHER, I T IS IMPORTANT TO TAKE NOTE THAT FOR THE ASST. YEAR 2005-06, THE APPELLANT COMPANY HAS SHOWN THE 'ELECTRIC FITTINGS' SEPARATELY ON WHICH THE APP ELLANT COMPANY HAS CLAIMED THE DEPRECIATION @ 15% (FOR THE ASST. YEAR 2010-11 IT IS @ 10%). 6. FURTHER, THE APPELLANT COMPANY WOULD LIKE TO STA TE THAT THE DISALLOWANCE ON ACCOUNT OF EXCESS DEPRECATION CLAIM ED ON ELECTRIC INSTALLATION FOR A. Y. 2009-10 WAS MADE BY THE L.D. A O. WHILE RENDERING THE ORDER U/S. 143(3) OF THE ACT. 1961 DA TED 20. 12.2011. THE APPELLANT COMPANY HAS FILED AS APPEAL WITH THE LD C IT (A) FOR A- Y 2009-10 AND WHILE RENDERING THE ORDER THE LD. CIT ( A) HAS ALLOWED THE CLAIM OF THE APPELLANT COMPANY. THE RELEVANT PARA - 1.3 OF THE ORDER ARE REPRODUCED HEREUNDER FOR YOUR HONOUR 'S READY REFER ENCE: 4.3 DECISION: I HAVE CAREFULLY CONSIDERED THE ASSES SMENT ORDER AND THE SUBMISSION FILED BY THE APPELLANT IT IS BROUGHT TO MV NOTICE THAT ITAT, AHMEDABAD FOR A.Y. 2005-06 IN THE ASSESSEE'S OWN CA SE HAS RULED THAT 'WE FIND THAT THE LOWER AUTHORITIES HAVE DECIDED SH E ISSUE BY MERELY LOOKING AT THE NOMENCLATURE GIVEN TO THE ASSET WITH OUT VERIFYING THE ACTUAL DETAILS OF THE ASSET AND THE NATURE OF THE A SSETS. IN OUR CONSIDERED OPINION THE ELECTRICAL FITTINGS WHICH FO RM INTEGRAL PART OF THE PLANT & MACHINERY AND THOSE ELECTRICAL FITTINGS WHICH ARE USED ALONG WITH THE PLANT & MACHINERY AND CANNOT HE USED SEPARATELY AS SUCH ARE PART OF PLANT & MACHINERY AND DEPRECIATION @ 25% IS ALLOWABLE IN RESPECT OF THE SOME. HOWEVER, IN CASE OF THOSE ELECTRICAL FITTINGS WHICH ARE INDEPENDENTLY USED A ELECTRICAL FITTINGS IN RASPECT OF THOSE ASSETS DEPRECIATION @ 15% IS ONLY ALLOWABLE. THE FACTS OF THE CASE IN THIS YEAR ARE SIMILAR TO THOSE FOR A. Y. 20 05-06. THEREFORE, THE DEPRECIATION RATE APPLICABLE FOR A. Y. 2009-10 @ 15 % IS ALLOWED (THE ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 7 - SAME WAS 25% AS PER I. T. RULES FOR A. Y. 2005-06). IN VIEW OF FINDINGS BY THE JURISDICTIONAL ITAT, AHMEDABAD, THE GROUND O F APPEAL IS ACCORDINGLY ALLOWED. 6.3 THE OBSERVATION OF THE AO AND THE SUBMISSION OF THE APPELLANT IS CONSIDERED CAREFULLY. AS POINTED OUT BY THE AR THE ISSUE IS COVERED BY THE DECISION OF HON'BLE ITAT IN APPELLANT'S OWN CAS E FOR A.Y. 2005-06 AND ALSO THE A.Y.2009-10. HENCE, RESPECTFULLY FOLLO WING THE DECISION OF HON'BLE ITAT THE AO IS DIRECTED TO ALLOW DEPRECIATI ON CLAIMED ON ELECTRIC INSTALLATION BEING PART OF PLANT AND MACHI NERY. ACCORDINGLY, APPEAL ON THIS GROUND IS ALLOWED . THE REVENUE WAS NOT ABLE TO CONTROVERT THE FINDINGS OF LEARNED CIT(A), THEREFORE, FINDING NO INFIRMITY IN THE ORDE R OF LEARNED CIT(A), GROUND NO.2 OF REVENUES APPEAL IS ALSO DISMISSED. 14. AS REGARDS THIRD GROUND, REGARDING DISALLOWANCE ON ACCOUNT OF PRIOR PERIOD EXPENSES, THE LEARNED CIT(A) HAS DISCU SSED THIS ISSUE FROM PARA 7.2 ONWARDS AND AFTER NOTING DOWN THE BRE AK UP OF EXPENSES WHICH WERE CLASSIFIED BY THE ASSESSEE AS PER PRIOR PERIOD EXPENSES AND THE YEAR OF THEIR CRYSTALLIZATION RIGHTLY DELETED T HE ADDITION BY HOLDING AS UNDER: 7.3 THE SUBMISSION AND THE CASE TAW QUOTED BY THE APPELLANT ARC CONSIDERED. IT IS NOTICED THAT THE LIABILITY IS CRY STALLIZED IN PREVIOUS YEARS. HENCE, THE CLAIM OF PRIOR PERIOD EXPENSES IS ALLOWABLE. HON'BLE I TAT MUMBAI ALSO DECIDED IN SIMILAR LINES IN LINE CA SE OF MAHARASTRA STATE ELECTRICITY VS DEPARTMENT OF INCOME TAX ON 30 SEPTEMBER, 2015 INCOME TAX APPELLATE TRIBUNAL, MUMBAI 'B' BENCH, 1T A NO. 3813 / MUM / 2009 ASSESSMENT YEAR-2001-02, ITA NO.1647 / M UM / 2010 ASSESSMENT YEAR-2002-03, ITA NO.L648/MUM/2010ASSESS MENT YEAR- 2003-04, WHERE IT IS CONCLUDED THAT WHEN THE ASSESS EE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, IT IS SUPPOSED TO FILE AN EXPLANATION THAT THE EXPENSES WERE NOT BOOKED IN EARLIER YEARS DUE TO SOME REASONABLE CAUSE. THE RELEVANT CONCLUDING PARA OF T HE ORDER OF HON'BLE 1TAT IS QUOTED HERE AS UNDER: '3. WE ARE AWARE THAT IT IS ONE OF THE WELL RECOGNI SED PRINCIPLE OF TAXATION THAT EARLIER YEARS' EXPENSES CAN BE ALLOWED, IN THE MERCANTILE METHOD OF ACCOUNTING, IN THE YEAR IN WHICH THE LIABILITY IS A CCEPTED AND PAID. BUT, AT THE SAME TIME IT IS ALSO ACCEPTED PRINCIPLE OF TAXATION THAT EVEN WHEN TIN' MASSES IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, I T IS SUPPOSED TO FILE AN EXPLANATION THAT THE EXPENSES WERE NOT BOOKED IN EA RLIER YEARS DUE TO SOME REASONABLE CAUSE LIKE LO NON-RECEIPT OF DETAILS, PE NDING LITIGATION, DECISION REGARDING UNLIQUIDATED DAMAGE, AN AGREEMENT ENTERED IN TO FOR MAKING PAYMENT FOR EARLIER PERIOD ETC AND THAT SUCH EXPENS ES GO/CRYSTALLISED DURING SUBSEQUENT ASSESSMENT YEAR. ' ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 8 - IT IS CLEAR FROM THE DETAILS GIVEN BY THE APPELLANT THAT THE APPELLANT HAD PROPER EXPLANATION WITH SUPPORTING EVIDENCE TO PROV E THAT THE LIABILITY IS CRYSTALLIZED ONLY IN THE PREVIOUS YEAR. THEREFOR E, FOLLOWING THE RATIO LAID DOWN BY HON'BLE ITAT MUMBAI IN ABOVE MENTIONED CASE AND THE DECISION OF HON'BLE BOMBAY HIGH COURT QUOTED BY THE APPELLANT, THE AO IS DIRECTED TO ALLOW PRIOR PERIOD EXPENSES OF RS.3, 72,824/- CLAIMED BY THE APPELLANT. ACCORDINGLY, APPEAL ON THIS GROUND I S ALLOWED. THEREFORE, FINDING NO INFIRMITY IN THE ORDER OF LEA RNED CIT(A), GROUND NO.3 OF REVENUES APPEAL IS ALSO DISMISSED. 15. NOW COMING TO GROUND NO.4 REGARDING DISALLOWANC E ON ACCOUNT OF FOREIGN COMMISSION EXPENSES, WE FIND THAT THIS I SSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER OF HONBLE ITA T FOR AY 2009-10 IN THE CASE OF ASSESSEE ITSELF WHERE THE HONBLE TR IBUNAL AFTER DISCUSSING THE ENTIRE FACT AND AFTER NOTING DOWN TH E PROVISIONS OF SECTION 9(1)(VII) AND SECTION 195 OF THE ACT HAS HE LD THAT THE PROVISIONS OF SECTION 195 AND SECTION 9 WERE NOT AP PLICABLE TO THE ASSESSEE AND THEREFORE HAS HELD THAT ASSESSEE WAS N OT LIABLE TO DEDUCT TDS AND THEREFORE NO DISALLOWANCE WAS WARRANTED UND ER S.40(A)(IA) OF THE ACT. FOR THE SAKE OF COMPLETENESS, RELEVANT FI NDING OF THE TRIBUNAL ARE REPRODUCED BELOW: 11. IN THE INSTANT CASE, IT IS SEEN, ADMITTEDLY TH AT THE NONRESIDENT AGENTS WERE ONLY PROCURING ORDERS ABROAD AND FOLLOW ING UP PAYMENTS WITH BUYERS. NO OTHER SERVICES ARE RENDERED OTHER T HAN THE ABOVE. SOURCING ORDERS ABROAD, FOR WHICH PAYMENTS HAVE BEE N MADE DIRECTLY TO THE NON-RESIDENTS ABROAD, DOES NOT INVOLVE ANY TECH NICAL KNOWLEDGE OR ASSISTANCE IN TECHNICAL OPERATIONS OR OTHER SUPPORT IN RESPECT OF ANY OTHER TECHNICAL MATTERS. IT ALSO DOES NOT REQUIRE A NY CONTRIBUTION OF TECHNICAL KNOWLEDGE, EXPERIENCE, EXPERTISE, SKILL O R TECHNICAL KNOW-HOW OF THE PROCESSES INVOLVED OR CONSIST IN THE DEVELOP MENT AND TRANSFER OF A TECHNICAL PLAN OR DESIGN. THE PARTIES MERELY SOUR CE THE PROSPECTIVE BUYERS FOR EFFECTING SALES BY THE ASSESSEE, AND IS ANALOGOUS TO A LAND OR A HOUSE/REAL ESTATE AGENT/BROKER, WHO WILL BE INVOL VED IN MERELY IDENTIFYING THE RIGHT PROPERTY FOR THE PROSPECTIVE BUYER/SELLER AND ONCE HE COMPLETES THE DEAL, HE GETS THE COMMISSION. THUS , BY NO STRETCH OF IMAGINATION, IT CANNOT BE SAID THAT THE TRANSACTION PARTAKES THE CHARACTER OF 'FEES FOR TECHNICAL SERVICES' AS EXPLA INED IN THE CONTEXT OF SECTION 9(1)(VII) OF THE ACT. 12. AS THE NON-RESIDENTS WERE NOT PROVIDING ANY TEC HNICAL SERVICES TO THE ASSESSEE, AS HELD ABOVE AND AS HELD BY THE COMM ISSIONER OF INCOME TAX (APPEALS), THE COMMISSION PAYMENT MADE TO THEM DOES NOT FALL INTO ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 9 - THE CATEGORY OF 'FEES OF TECHNICAL SERVICES' AND TH EREFORE, EXPLANATION (2) TO SECTION 9(1) (VII) OF THE ACT, AS INVOKED BY THE ASSESSING OFFICER, HAS NO APPLICATION TO THE FACTS OF THE ASSESSEE'S C ASE. 13. IN THIS CASE, THE COMMISSION PAYMENTS TO THE NO N RESIDENT AGENTS ARE NOT TAXABLE IN INDIA, AS THE AGENTS ARE REMAINI NG OUTSIDE, SERVICES ARE RENDERED ABROAD AND PAYMENTS ARE ALSO MADE ABRO AD. 14. THE CONTENTION OF THE LEARNED COUNSEL FOR THE R EVENUE IS THAT THE TRIBUNAL OUGHT NOT TO HAVE RELIED UPON THE DECISION G.E.INDIA TECHNOLOGY'S CASE, CITED SUPRA, IN VIEW OF INSERTIO N OF EXPLANATION 4 TO SECTION 9(1)(I) OF THE ACT WITH CORRESPONDING INTRO DUCTION OF EXPLANATION 2 TO SECTION 195(1) OF THE ACT, BOTH BY THE FINANCE ACT, 2012, WITH RETROSPECTIVE EFFECT FROM 01-04-1962. 15. THE ISSUE RAISED IN THIS CASE HAS BEEN THE SUBJ ECT MATTER OF THE DECISION, IN THE RECENT CASE, CIT V. KIKANI EXPORTS (P.) LTD. [2014] 369 ITR 96/[2015] 232 TAXMAN 255/49 TAXMANN.COM 601 (MA D.) WHEREIN THE CONTENTION OF THE REVENUE HAS BEEN REJECTED AND ASS ESSEE HAS BEEN UPHELD AND THE RELEVANT OBSERVATION READS AS UNDER: '... THE SERVICES RENDERED BY THE NON-RESIDENT AGEN T COULD AT BEST BE CALLED AS A SERVICE FOR COMPLETION OF THE EXPORT CO MMITMENT AND WOULD NOT FALL WITHIN THE DEFINITION OF 'FEES FOR TECHNIC AL SERVICES' AND, THEREFORE, SECTION 9 WAS NOT APPLICABLE AND, CONSEQ UENTLY, SECTION 195 DID NOT COME INTO PLAY. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER TOWARDS EXPORT COMMISSION PAID BY THE ASSESSEE TO THE NON-RESIDENT WAS RIGHTLY DELETED.' 16. WHEN THE TRANSACTION DOES NOT ATTRACT THE PROVI SIONS OF SECTION 9 OF THE ACT, THEN THERE IS NO QUESTION OF APPLYING EXPL ANATION 4 TO SECTION 9 OF THE ACT. THEREFORE, THE REVENUE HAS NO CASE AN D THE TAX CASE APPEAL IS LIABLE TO BE DISMISSED. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A), GROUND NO.4 OF REVENUES APPEAL IS ALSO DISMISSED. 16. AS REGARDS LAST GROUND OF APPEAL, REGARDING DIS ALLOWANCE OF PRODUCT REGISTRATION FEE, WE FIND THAT THIS IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF TRIBUNAL IN THE CASE O F ASSESSEE ITSELF FOR AY 2009-10, WHERE THE HONBLE TRIBUNAL IN PARA NOS. 8 TO 10 HAS DISMISSED THE APPEAL OF REVENUE BY UPHOLDING THE OR DER OF LEARNED CIT(A) WHEREIN HE HAD ALLOWED RELIEF TO THE ASSESSE E UNDER SIMILAR FACTS AND CIRCUMSTANCES. FOR THE SAKE OF COMPLETEN ESS, PARA 8 TO 10 OF HONBLE TRIBUNAL IN THE CASE OF ASSESSEE IS REPRODU CED BELOW: ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 10 - 8. IN GROUND NO. 2, THE ASSESSING OFFICER IS AGGRI EVED OF LEARNED CIT(A)'S 'DELETING THE DISALLOWANCE OF RS.30,86,537 MADE ON ACCOUNT OF PRODUCT REGISTRATION FEES'. 9. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INC URRED AN EXPENDITURE OF RS.38,78,253 IN REGISTRATION OF PATENTS OF ASSES SEE COMPANY'S PRODUCTS WITH VARIOUS GOVERNMENT AUTHORITIES IN THE RESPECTIVE COUNTRIES, AND REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THIS EXPENDITURE, WHICH RESULTS IN SUBSTANTIAL AND ENDUR ING BENEFITS TO THE ASSESSEE, NOT BE TREATED AS CAPITAL EXPENDITURE. IT WAS EXPLAINED BY THE ASSESSEE THAT THE EXPENDITURE IS ROUTINE MARKETING EXPENSES AS IT IS MANDATORY TO OBTAIN REGISTRATION OF PRODUCTS IN THE COUNTRIES IN WHICH THESE PRODUCTS ARE SOLD, AND THAT, EVEN AFTER PAYIN G THIS REGISTRATION FEES-WHICH IS VALID FOR A LIMITED TIME PERIOD, THE FEES IS REQUIRED TO BE PAID ON RECURRING BASIS. THE ASSESSING OFFICER, HOW EVER, REJECTED THIS EXPLANATION, PROCEEDED TO TREAT THIS AS AN ASSET AS THE REGISTRATION OF PRODUCT 'ENTITLES THE ASSESSEE FOR A BENEFIT OF END URING NATURE IN THE FORM OF MARKETING RIGHT (INTANGIBLE ASSET) IN THAT COUNTRY', GRANT DEPRECIATION IN RESPECT OF THE SAME, AND DISALLOW T HE BALANCE AMOUNT WHICH WORKED OUT TO RS.30,86,537. AGGRIEVED, ASSESS EE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO DELETED THIS DISALLOWANCE. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEF ORE US. 10. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING P ERUSED THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY HON'BLE JURISDICTIONAL HIGH COURT' S JUDGMENTS IN THE CASES OF CIT V. TORRENT PHARMACEUTICAL LTD. [2013] 29 TAXMANN.COM 405 (GUJ) AND CIT V. CADILA HEALTHCARE LTD. [2013] 31. TAXMANN.COM 300/214 TAXMAN 672 (GUJ.) WHEREIN THEIR LORDSHIPS H AVE, INTER ALIA, HELD THAT THE PRODUCT REGISTRATION EXPENSES IS ELIG IBLE FOR DEDUCTION AS REVENUE EXPENDITURE. RESPECTFULLY FOLLOWING ESTEEME D VIEWS OF HON'BLE JURISDICTIONAL HIGH COURT, WE APPROVE THE CONCLUSIO NS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENT IN TH E CASE OF ASSESSEE ITSELF THE GROUND IS ALSO DISMISSED. 17. AS REGARDS THE PROFESSIONAL FEE ON PATENTS, THE LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE BY RELYING ON TH E JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CADILA HEALTHCARE LTD. (SUPRA) AND HAS FURTHER RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. FINELY MILLS LTD. (SU PRA). THE FINDINGS OF THE LEARNED CIT(A) ARE REPRODUCED BELOW: ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 11 - 10.3 ON THE ISSUE OF DISALLOWANCE OF THE PROFESSIONAL FEES ON PATENT OF RS.11,48,325/-, THE AR OF THE APPELLANT SUBMITTE D AS UNDER; 'THE APPELLANT COMPANY HAS PAID PROFESSIONAL FEES T O THE CONSULTANTS FOR PATENT RELATED SERVICES LIKE: (I) PREPARING AND FILING APPLICATION FOR GRANT OF P ATENT (II) REVIEWING AND PREPARING RELEVANT DOCUMENT (III) FEES FOR DEFENDING PATENTS INCLUDING PREPARAT ION OF RESPONSES TO THE PREGRANT OPPOSITION ETC. (IV) OFFICIAL FILING FEES FOR FILING OF REQUISITE S TATUTORY FORMS (V) TIME SPENT IN FOLLOW-UP MATTER PERIODICALLY, RE VIEWING AND REPORTING THE SAME. (VI) EXTRACTING AND REVIEWING REGISTRATION CERTIFIC ATE. HOWEVER, THE LD. A.O. HAS NOT CONSIDERED THE SAME A ND HAS MADE THE DISALLOWANCE WHICH IS BAD IN THE EYE OF LAW. CONSID ERING THE NATURE OF BUSINESS OF THE APPELLANT COMPANY AND THE EXPENDITU RE INCURRED IN THIS CONNECTION, THE LD. A,O. OUGHT TO HAVE ALLOWED THE SAME. THERE IS NO ENDURING BENEFIT OR ADVANTAGE HAS BEEN RECEIVED BY THE APPELLANT COMPANY, WINCH CAN BE CONSIDERED AS CAPITAL ASSET ( INTANGIBLE) AS ALLEGED BY THE LD. A.O. CONSIDERING THE ABOVE FACTS, THE DISALLOWANCE OF RS .11,48,325/- AS PROFESSIONAL FEES ON PATENT MADE BY THE LD. A.O. IS REQUIRED TO BE DELETED. AS A CONSEQUENCE, THE DEPRECIATION U/S.32( I)(III) OF THE ACT OF RS. 2,62,081/- ALLOWED BY THE A. O. ON THIS EXPENSE S TREATING THE SAME AS CAPITAL IN NATURE IS REQUIRED TO BE DELETED/REJE CTED. ' THE AR HAS AGAIN RELIED ON THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CADILA HEALTHCARE LTD. TA X APPEAL NO.752 OF 2012 ORDER DATED 20.03.2013 (2013) 31 TAXI7IANN.COM 300 (GUJ,). ON THE PERUSAL OF THE DECISION OF HONBLE HIGH COURT I T IS NOTICED THAT THE COURT AS DECIDED THAT THE EXPENDITURE INCURRED BY C OMPANY IN DEFENDING/PROTECTING THE PATENT ARC OF NOT IN THE N ATURE OF ENDURING BENEFIT AND BY RELYING ON THE DECISION OF HON'BLE S UPREME COURT IN THE CASE OF CIT V. FINLEY MILLS LTD. (1951) 20 ITR 475 DECIDED AS UNDER: ' WITH RESPECT TO THE EXPENDITURE FOR TRADEMARK AND PATENT, LEARNED COUNSEL FOR THE RESPONDENT-ASSESSEE RIGHTLY POINTED OUT THAT SUCH ISSUE WAS EXAMINED BY THE SUPREME COURT I N THE CASE OF CIT V. FINLEY MILLS LTD. [1951] 20 ITR 475, WHER EIN IT WAS HELD AND OBSERVED AS UNDER: 'IN OUR OPINION, THE CONTENTION URGED ON BEHALF OF THE APPELLANT MUST FAIL. IT IS NOT CONTENDED THAT BY THE TRADE MA RKS ACT A NEW ASSET HAS COME INTO EXISTENCE. IT WAS CONTENDED THA T AN ADVANTAGE OF AN ENDURING NATURE HAD COME INTO EXIST ENCE. IT WAS ARGUED THAT JUST AS MACHINERY MAY ATTAIN A HIGHER V ALUE BY AN IMPLEMENTATION CAUSING GREATER PRODUCTIVE CAPACITY, IN THE PRESENT CASE THE TRADE MARK WHICH EXISTED BEFORE TH E TRADE MARKS ACT ACQUIRED AN ADVANTAGE OF AN ENDURING NATU RE BY REASON OF THE TRADE MARKS ACT AND THE FEES PAID FOR REGISTRATION THEREUNDER WERE IN THE NATURE OF CAPITAL EXPENDITUR E. IN OUR OPINION, THIS ANALOGY IS FALLACIOUS. THE MACHINERY WHICH ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 12 - ACQUIRES U GREATER PRODUCTIVE CAPACITY BY REASON OF ITS IMPROVEMENT BY THE INCLUSION OF SOME NEW INVENTION NATURALLY BECOMES A NEW AND ALTERED ASSET BY THAT PROCESS. SO LONG AS THE MACHINERY LASTS, THE IMPROVEMENT CONTINUES TO THE A DVANTAGE OF THE OWNER OF THE MACHINERY. THE REPLACEMENT OF A DI LAPIDATED ROOF BY A MORE SUBSTANTIAL ROOF STANDS ON THE SAME FOOLING. THE RESULT HOWEVER OF THE TRADE MARKS ACT IS ONLY TWO-F OLD. BY REGISTRATION, THE OWNER ABSOLVED FROM THE OBLIGATIO N TO PROVE HIS OWNERSHIP OF THE TRADE MARK. IT IS TREATED AS PRIMA FACIE PROVED ON PRODUCTION OF THE REGISTRATION CERTIFICATE. IT THUS MERELY SAVES HIM THE TROUBLE OF LEADING EVIDENCE, IN THE E VENT OF A SUIT, IN A COURT OF LAW, TO PROVE HIS TITLE TO THE TRADE MARK. IT HAS BEEN SAID THAT REGISTRATION IS IN THE NATURE OF COLLATER AL SECURITY FURNISHING THE TRADER WITH A CHEAPER AND MORE DIREC T REMEDY AGAINST INFRINGERS. CANCEL THE REGISTRATION AND HE HAS STILL HIS RIGHT ENFORCEABLE FIT COMMON LAW LO RESTRAIN THE PI RACY OF HIS TRADE MARK. IN OUR OPINION, THIS IS NEITHER SUCH AN ASSET NOR AN ADVANTAGE SO AS TO MAKE PAYMENT FOR ITS REGISTRATIO N A CAPITAL EXPENDITURE. IN THIS CONNECTION IT MAY BE USEFUL LO NOTICE THAT EXPENDITURE INCURRED BY A COMPANY IN DEFENDING TITL E TO PROPERLY IS NOT CONSIDERED EXPENSE OF A CAPITAL NATURE. IN S OUTHERN (H M INSPECTOR OF TUXES) V. BORAX CONSOLIDATED LTD. 10 1 . T R. SUP. 1, IT IS THERE STATED THAT WHERE A SUM OF MONEY IS LAI D OUT FOR THE ACQUISITION OR THE IMPROVEMENT OF A FIXED CAPITAL A SSET IT IS ATTRIBUTABLE TO CAPITAL BUT OF NO ALTERATION IS MAD E IN THE FIXED CAPITAL ASSET BY THE PAYMENT, THEN IT IS PROPERLY A TTRIBUTABLE TO REVENUE, BEING IN SUBSTANCE A MATTER OF MAINTENANCE , THE MAINTENANCE OF THE CAPITAL STRUCTURE OR THE CAPITAL ASSET OF THE COMPANY. IN OUR OPINION, THE ADVANTAGE DERIVED BY T HE OWNER OF THE TRADE MARK BY REGISTRATION FALLS WITHIN THIS CL ASS OF EXPENDITURE THE FACT THAT A TRADE MARK AFTER REGIST RATION COULD BE SEPARATELY ASSIGNED, AND NOT AS A PART OF THE GO OD WILL OF THE BUSINESS ONLY, DOES NOT ALSO MAKE THE EXPENDITURE F OR REGISTRATION A CAPITAL EXPENDITURE. THAT IS ONLY AN ADDITIONAL AND INCIDENTAL FACILITY GIVEN TO THE OWNER OF THE TRADE MARK. IT ADDS NOTHING TO THE TRADE MARK ITSELF. ' 10.4 THE OBSERVATION OF THE AO AND THE SUBMISSION O F THE APPELLANT IS CONSIDERED CAREFULLY. AS THE FACTS OF THE CASE ON T HIS POINT ARE SIMILAR TO THE FACTS DEALT WITH BY THE HON'BLE HIGH COURT O F GUJARAT IN CASE OF CADILA HEALTHCARE LTD. (SUPRA), RESPECTFULLY FOLLOW ING THE DECISION, THE AO IS DIRECTED TO ALLOW THE PROFESSIONAL FEES OF RS .11,48,325/- AND CONSEQUENTLY TO IGNORE THE ALLOWANCE OF DEPRECIATIO N ACCORDINGLY, APPEAL ON GROUND NO.7 IS ALSO ALLOWED. THE REVENUE WAS NOT ABLE TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A), THEREFORE FINDING NO INFIRMITY IN THE ORDER OF LEARNED CIT(A), GROUND NO.5 OF APPEAL IS ALSO DISMISSED. 18. IN VIEW OF THE ABOVE, REVENUES APPEAL IS DISMI SSED. ITA NO. 1325/AHD/17 WITH CO NO.31/AHD/18 [M/S. TROIKAA PHARMACEUTICALS LTD.] A.Y. 2010-11 - 13 - 19. THE CROSS OBJECTION ARE MERELY SUPPORTIVE OF LE ARNED CIT(A)S ORDER. THEREFORE, THE SAME ARE DISMISSED. 20. IN THE COMBINED RESULT, REVENUES APPEAL AND A SSESSEES CO BOTH ARE DISMISSED. SD/- SD/- (RAJPAL YADAV) (T. S. KAPOOR) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 04/03/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE &. '() * / CONCERNED CIT 4. *- / CIT (A) -. ./0 122()3 ()!3 45' / DR, ITAT, AHMEDABAD 6. 078 9 / GUARD FILE. BY ORDER / 3 /4 ()!3 45' THIS ORDER PRONOUNCED IN OPEN COURT 04/03/2020