Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 2394 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-03-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
28-09-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 1666/HYD/2017 ASSESSMENT YEAR: 2012-13 DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD VS M/S. MYLAN LABORATORIES LIMITED, (BEING THE AMALGAMATED COMPANY OF ASTRIX LABORATORIES LIMITED) , HYDERABAD [PAN: AADCM3491M] (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. N. SWAPNA, DR FOR ASSESSEE : SHRI K.A. SAI PRASAD, AR DATE OF HEARING : 08-03-2018 DATE OF PRONOUNCEMENT : 16-03-2018 O R D E R PER S. RIFAUR RAHMAN, A.M. : THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, HYDERABAD, DATED 28-07-2017, FOR THE AY. 2012-13. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, ASTRIX LABORATORIES LIMITED (NOW MERGED WITH MYLAN LABORATOR IES LTD W.E.F. 01-04-2014) WAS ENGAGED IN THE BUSINESS OF MA NUFACTURE OF PHARMACEUTICAL PRODUCTS. FOR THE AY. 2012-13, IN R ELATION TO ITA NO. 1666/HYD/2017 :- 2 -: THE PREVIOUS YEAR ENDED 31 ST MARCH 2012, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30-11-2012 DECLARING TOTAL INCOME AT RS. 28,95,25,656/- UNDER NORMAL PROVISIONS OF THE INCOME TAX ACT [ACT] AND BOOK PROFIT OF RS. 28,51,36,536/- U/S.115JB OF THE ACT. THE SAID RETURN WAS PROCESSED U/S.143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND N OTICES U/S. 143(2) & 142(1) OF THE ACT WERE ISSUED. 3. SINCE THE ASSESSEE TRANSACTED WITH ASSOCIATED ENTERPRISES (AE) AS DEFINED IN SECTION 92A OF THE ACT, THE CASE WAS REFERRED TO TRANSFER PRICING OFFICER (TPO), WHO ISSUED TRANSFER PRICING ORDER DATED 30-01-2016 BY MAKING A NIL ADJUSTMENT U/S. 92CA OF THE ACT. THE AO FRAMED ASSESSM ENT ORDER U/S 143(3) R.W.S. 92CA(3) OF THE ACT DATED 24- 03-2016 (RECEIVED BY THE ASSESSEE ON 31-03-2016) TAKING INTO ACCOUNT THE ABOVE TRANSFER PRICING ORDER. THE AO VIDE HIS OR DER DETERMINED THE TOTAL INCOME AT RS. 34,41,99,459/- UNDE R NORMAL COMPUTATION AND AT RS. 28,51,36,536/- U/S. 115 JB. THE AO WORKED OUT THE ASSESSABLE INCOME AT RS. 34,41,99,459/- AND INCOME TAX INCLUDING SURCHARGE & EDUCATION CESS AT RS 11,16,75,515/- AND AFTER ADJUSTIN G TAXES ALREADY PAID AND LEVYING INTERESTS U/S. 234B & 234C TH E NET TAX DEMAND WAS WORKED OUT TO RS. 2,69,68,087/-. 4. AGGRIEVED BY THE SAID ORDER, ASSESSEE PREFERRED A N APPEAL U/S. 246A OF THE ACT BEFORE THE LD.CIT(A). BASING ON THE FACTS OF THE CASE, LD.CIT(A) PARTLY ALLOWED THE APPEAL. AGG RIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS: ITA NO. 1666/HYD/2017 :- 3 -: 1. THE CIT(A) ERRED IN DELETING THE DISALLOWANCE O F DEPRECIATION OF RS. 5,46,73,799/- ON TECHNICAL KNOW-HOW AND DRUG MASTER FILES. 2. THE CIT(A) ERRED IN IGNORING THE FACT THAT REVEN UES APPEAL ON IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR AY. 2009 -10 IS PENDING BEFORE HON'BLE HIGH COURT. GROUND NO. 3 IS GENERAL IN NATURE. 5. CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL ON RE CORD. IT IS A FACT THAT AO HAS DISALLOWED THE DEPRECIATION OF R S. 5,46,73,799/- CLAIMED BY ASSESSEE ON INTANGIBLE ASSE TS INVOLVING TECHNICAL KNOW-HOW AND DRUG MASTER FILES (D MF). ASSESSEE WAS CLAIMING THE DEPRECIATION OVER THE YEARS AND CONSISTENTLY AO HAS DISALLOWED THE DEPRECIATION FOR AY. 2006- 07. EVEN DURING THIS ASSESSMENT YEAR, THE SAME STAND W AS FOLLOWED. HOWEVER, WE NOTICED THAT THE CO-ORDINATE BENC H HAS ALLOWED THE CLAIM OF THE ASSESSEE IN THE PREVIOUS ASSE SSMENT YEARS. AO HAS DISALLOWED THE DEPRECIATION DURING THE A.Y. BEFORE US MERELY BECAUSE IT HAS NOT REACHED FINALITY. BY RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH, WE ARE INCLINED TO UPHOLD THE ORDER OF CIT(A). THEREFO RE, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2018 SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHMA N) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 16 TH MARCH, 2018 TNMM ITA NO. 1666/HYD/2017 :- 4 -: COPY TO : 1. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2) , HYDERABAD. 2. M/S. MYLAN LABORATORIES LIMITED (BEING THE AMALGAMATED COMPANY OF ASTRIX LABORATORIES LIMITED) , PLOT NO. 564/A/22, ROAD NO. 92, JUBILEE HILLS, HYDERABAD . 3. CIT(APPEALS)-4, HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.
