Cadila Healthcare Ltd., Ahmedabad V. The Pr.CIT-1, Ahmedabad

ITA 2713/AHD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8937 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Revision of order; Earning of tax free income; Corroborative evidences; Assessment record; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 40(b); 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.2713/AHD/2015 (ASSESSMENT YEAR:2009-10) CADILA HEALTHCARE LTD. ZYDUSTOWER, OPP. ISKCON TEMPLE, SATELLITE CROSS ROADS, AHMEDABAD - 380015 APPELLANT VS. PCIT-1, AHMEDABAD RE SPONDENT PAN: AAACC6253G /BY ASSESSEE : SHRI JIGAR M. PATEL, A.R. /BY REVENUE : SHRI JAGADISH, CIT. D.R. /DATE OF HEARING : 17.01.2017 /DATE OF PRONOUNCEMENT : 16.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 ARISES AGAINST PCIT-1, AHMEDABADS ORDER DATED 11.08.2015, EXERCIS ING HIS REVISION JURISDICTION IN DIRECTING THE ASSESSING OFFICER TO FRAME AFRESH ASSESSMENT, IN PROCEEDINGS U/S.263 OF THE INCOME TAX ACT, IN SHORT THE ACT. ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 2 - 2. WE STRAIGHTWAY COME TO THE RELEVANT FACTS. THE ASSESSEE COMPANY MANUFACTURES PHARMACEUTICAL PRODUCTS, DIAGNOSTIC KI TS AS WELL AS COSMETICS. IT FILED ITS RETURN ON 25.09.2009 STATING NIL INCOM E. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT IN QUESTION ON 23.01.20 14 ACCEPTING ITS MAT COMPUTATION DETERMINING BOOK PROFITS OF RS.1,77,27, 48,435/-. 3. IT IS EVIDENT THAT THE ABOVE PCIT -1, AHMEDABAD THEREAFTER TERMED THE ABOVE REGULAR ASSESSMENT AS ERRONEOUS CAUSING PREJU DICE TO INTEREST OF THE REVENUE SO AS TO PROPOSE EXERCISE OF SECTION 263 RE VISION JURISDICTION VIDE SHOW CAUSE NOTICE IN QUESTION DATED 22.07.2015 AS U NDER: (1) FROM THE COMPUTATION OF INCOME, IT IS NOTICED THAT COMPANY HAS CLAIMED AN AMOUNT OF RS.48,00,00,000/- AS EXEMPT IN COME U/S.28(V) BEING THE REMUNERATION RECEIVED FROM PARTNERSHIP FI RM BUT DISALLOWED U/S.40 (B) IN FIRM'S INCOME. THE ASSESSEE COMPANY I S A PARTNER OF THE FIRM VIZ. M/S.ZYDUS HEALTHCARE, SIKKIM AND ALSO REC EIVED SHARE OF PROFIT AND INTEREST FROM THE FIRM. THIS PARTICULAR ITEM OF INCOME LE REMUNERATION PAID BY THE FIRM WAS DISALLOWED BY THE FIRM ITSELF IN THE COMPUTATION OF INCOME ON THE GROUND THE PARTNER IS NOT A WORKING PARTNER. THEREFORE, THE ASSESSEE COMPANY I.E. RECIP IENT HAS CLAIMED IT AS EXEMPT INCOME U/S.28 (V). (2) AUDIT SCRUTINY OF ASSESSMENT RECORDS OF THE ASS ESSEE COMPANY AND FIRM'S RECORDS AVAILABLE INCLUDING OF THE PARTNERSH IP DEED DATED 1/3/2007, ADDENDUM TO PARTNERSHIP DEED DATED 1/4/20 07 AND SUBSEQUENT MEMORANDUM DATED 15/3/2008 REVEALED THE FOLLOWING FACTS:- I) THE ASSESSEE COMPANY IS HAVING 96 % SHARE IN THE PARTNERSHIP BUSINESS AND IT WAS PAID SHARE OF PROFIT AND INTERE ST BY THE FIRM AS PER PARTNERSHIP DEED DURING THE PY 2008-09. II) FOR PAYMENT OF REMUNERATION TO THE ASSESSEE COM PANY, IT IS NOTICED THAT THE PARTNERSHIP FIRM ENTERED AN AGREEMENT/ADDE NDUM DATED 1/4/2007 WITH ASSESSEE COMPANY FOR MARKETING ITS PR ODUCTS AND PROVIDING ALL BUSINESS AUXILIARY MARKETING SERVICES LIKE CONSIGNMENT AND SALES AGENT AND AFTER-SALES SERVICES FOR WHICH THE ASSESSEE COMPANY WOULD BE ENTITLED TO GET REMUNERATION @ 12.5 % OF T HE TOTAL TURNOVER OF THE FIRM, VIDE MEMORANDUM AGREEMENT DATED 15/3/2008 . III) THE PARTNERSHIP FIRM BEING AN INDUSTRIAL UNDER TAKING IN SIKKIM IS ENTITLED TO GET 80IC DEDUCTION OF ENTIRE ITS BUSINE SS PROFIT AND THEREFORE, ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 3 - THE FIRM ITSELF DISALLOWED THE REMUNERATION PAID TO THE ASSESSEE COMPANY ON THE GROUND THAT THE COMPANY IS NOT WORKI NG PARTNER. DURING THE A Y 2009-19, AS PER IT RETURN, THE FIRM HAS CLAIMED ENTIRE BUSINESS INCOME AS DEDUCTION U/S.80IC, AFTER DISALL OWING SO CALLED PARTNERS' REMUNERATION OF RS.48.00 CRORE. THE FACT IS THAT THE REMUNERATION WAS PAID FOR THE PROVIDING BUSINESS MA RKETING AUXILIARY SERVICES TO THE FIRM THROUGH ITS INFRASTRUCTURE AND NETWORK. IV) THE ASSESSEE COMPANY UNDER PRETEXT OF DISALLOWA NCE OF PARTNER'S REMUNERATION IN FIRM'S INCOME CLAIMED IT AS EXEMPT INCOME UNDER SECTION 28(V) OF THE INCOME TAX ACT. IN FACT, THE C OMPANY RECEIVED SERVICE CHARGES FOR PROVIDING AUXILIARY MARKETING S ERVICES TO THE FIRM AND FOR WHICH IT HAS USED ITS NETWORK AND INFRASTRU CTURE SPREAD ALL OVER INDIA. V) IT IS WORTH NOTING THAT THE ORIGINAL PARTNERSHIP AGREEMENT DID NOT ENVISAGE ANY PAYMENT OF REMUNERATION TO M/S. CADILA HEALTHCARE AND IN THE SUBSEQUENT ADDENDUM ISSUED HAD CONTAINED THE SC OPE OF SERVICES TO BE PERFORMED BY CADILA HEALTHCARE AND CONDITION FOR PAYMENT OF REASONABLE REMUNERATION. IN THE SUBSEQUENT MEMORAND UM DATED 15/3/2008 EXECUTED, IT WAS PRESCRIBED THAT 12.5% OF THE TOTAL SALES TURNOVER WOULD BE PAID AS REMUNERATION. THUS, IT IS CLEAR THAT THIS WAS DONE AFTER A SECOND THOUGHT TO AVOID PAYMENT TAX, T HROUGH THE COLORFUL DEVICE UNDER THE GUISE OF REMUNERATION TO PARTNER. 2. IN VIEW OF THE ABOVE FACTS, THE INCOME/REMUNERAT ION RECEIVED FROM THE FIRM IS LIABLE TO BE TREATED AS 'OTHER INCOME OF TH E ASSESSEE COMPANY AND DOES NOT BECOME ELIGIBLE FOR TREATING IT AS EXEMPT INCOM E. 3. THE ASSESSEE COMPANY DELIBERATELY ATTEMPTED TO EVADE TAX THROUGH THIS COLOURFUL DEVICE. IT IS EVIDENT FROM THE ABOVE FACT S THAT ON ACCOUNT OF FAILURE OF THE ASSESSING OFFICER TO EXAMINE ALL RELEVANT FACTS OF THE CASE SO AS TO PIERCE THE CORPORATE VEIL, THERE IS SUBSTANTIAL LOSS TO THE RE VENUE. THERE IS APPARENT LACK OF PROPER APPLICATION OF MIND AND ALSO LACK OF ENQUIRY AND INVESTIGATION. THE ASSESSMENT ORDER IS, THEREFORE, NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN TERMS OF SECTION 263 OF THE INCOME-TAX ACT, 1961. 4. THE ASSESSEE FILED ITS REPLY ON 22.07.2015 STRON GLY CONTESTING THE ABOVE SHOW CAUSE NOTICE. LEARNED PCIT HOWEVER REJE CTS ITS EXPLANATION IN THE ORDER UNDER CHALLENGE READING THE FOLLOWING: 6. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE AR OF THE ASSESSEE. SO FAR AS THE OBJECTION OF THE ASSESSEE AGAINST PROCEEDINGS U/S 263 IS CONCERNED ON THE GROUND THAT ACTION U/S 263 IS NOT POSSIBLE IN CASES WHERE THE A.O. HAD ALREADY EXAMINED THE ISSUE, THIS PROPOSAL IS PALPABLY UNTENABLE FOR THE REASON THAT THE POWER U/S 263 IS INTENDED TO CORRECT THE ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 4 - WRONG ASSESSMENT MADE BY THE ASSESSING AUTHORITY. A S A MATTER OF FACT, IT APPEARS THAT NO SUCH INQUIRIES HAVE BEEN CONDUCTED BY THE AO. THE AO HAS SIMPLY ACCEPTED THE CLAIMS OF THE ASSESSEE AND FAIL ED TO MAKE ANY ENQUIRY WHICH WERE CALLED IN THE CIRCUMSTANCES OF THE CASE. IT IS SETTLED LAW THAT U/S 263 THE CIT HAS THE POWER TO SET ASIDE THE ASSESSMENT O RDER AND SEND THE MATTER FOR FRESH ASSESSMENT IF HE IS SATISFIED THAT FURTHER EN QUIRY IS NECESSARY AND THAT THE IMPUGNED ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THE SUPREME COURT HAS HELD IN CIT VS SHREE MANJUNATHESW ARE PACKING PRODUCTS & CAMPHOR WORKS, 231 ITR 53, THAT THE REVISIONAL POWE R CONFERRED ON THE COMMISSIONER U/S 263 IS OF WIDE AMPLITUDE. RELIANCE IS ALSO PLACED ON CIT VS. SESHASAYEE PAPER & BOARDS LTD., (2000) 242 ITR 490 (MADRAS), CIT VS. SOUTH INDIA SHIPPING CORPORATION LTD. (1998) 233 ITR 546 (MAD.), ETC. MOREOVER, THE RECENT AMENDMENT IN ACT W.E.F. 1-4-2015 LEAVES NO S COPE FOR ANY DOUBT IN THE MATTER AS LACK OF ENQUIRY IS ENOUGH TO INVOKE THE P ROVISION OF SECTION 263. 7. AS REGARDS THE MERITS, THE ASSESSEE HAS CONTENDE D THAT THE PAYMENT OF RS.48.00 CRORES WAS TOWARDS DISCHARGING OF VARIOUS FUNCTIONS RELATED TO MARKETING, AUXILIARY, AND AFTER SALES SERVICES EXEC UTED BY THE ASSESSEE FOR ZYDUS HEALTHCARE, SIKKIM. IT CAN THEREFORE BE CONST RUED THAT THE ASSESSEE HAS PROVIDED THE INFRASTRUCTURE IN THE FORM OF DEALERSH IP NET WORK AND HAS ALSO GIVEN SERVICES TO THE FIRM AS AGREED UPON. IT IS TH EREFORE NOT COMPREHENSIBLE AS TO ON WHAT BASIS THE ASSESSEE IS CONSIDERED AS A SL EEPING PARTNER BY THE FIRM. THE ASSESSEE HAS 96% SHARE IN THE PARTNERSHIP FIRM NAMELY, ZYDUS HEALTHCARE, SIKKIM AND HAS ALSO RECEIVED SHARE OF PROFIT AND IN TEREST FROM THE FIRM. AS PER THE MEMORANDUM OF UNDERTAKING DATED 15-03-2008 BETW EEN THE FIRM AND THE ASSESSEE, IT WAS DECIDED THAT THE ASSESSEE WILL MAR KET THE PRODUCTS OF THE FIRM AND ALSO PROVIDE AUXILIARY MARKETING SERVICES LIKE CONSIGNMENT, SALES AGENT AND AFTER SALES SERVICE FOR WHICH THE ASSESSEE WOUL D BE ELIGIBLE FOR REMUNERATION @ 12.5% OF THE TOTAL TURNOVER OF THE F IRM. ACCORDINGLY, THE REMUNERATION OF RS.48 CRORES HAS BEEN PAID BY THE F IRM TO THE ASSESSEE. IN THE RETURN OF INCOME OF THE FIRM, THE EXPENSES OF REMUN ERATION PAID TO THE ASSESSEE WAS ADDED BACK TO INCOME ON THE GROUND THAT THE ASS ESSEE IS NOT A WORKING PARTNER IN TERMS OF SECTION 40(B). ON THE OTHER HAN D, THE ASSESSEE HAS CLAIMED THAT REMUNERATION RECEIVED IS EXEMPT U/S 28(V) SINC E THE FIRM HAS ALREADY DISALLOWED THE SAME U/S 40(B). THE FIRM BEING AN IN DUSTRIAL UNDERTAKING AT SIKKIM IS ENTITLED TO DEDUCTION OF ITS ENTIRE PROFI TS U/S 80IC AND HENCE, THE INCREASE IN GROSS INCOME HAD NO IMPACT ON THE TOTAL INCOME OF THE FIRM. IT IS THEREFORE EVIDENT THAT THE AO HAS SIMPLY CALLED FOR THE SUBMISSION OF THE ASSESSEE ON THIS ISSUE AND ACCEPTED THE SAME WITHOU T CONDUCTING ANY FURTHER INQUIRY. THE FACT THAT REMUNERATION OF RS.48 CRORES WAS PAID BY THE FIRM SHOWS THAT THIS AMOUNT REPRESENTS 12.5% OF THE TOTAL TURN OVER OF THE FIRM AS PER THE AGREEMENT BETWEEN THE FIRM AND THE ASSESSEE. THIS S HOWS THAT THE FIRM HAS ACHIEVED A TURNOVER OF AROUND RS.384 CRORES FOR THE YEAR UNDER CONSIDERATION. IF THE ASSESSEE HAD NOT PROVIDED ANY SERVICES OF MA RKETING THE PRODUCTS OF THE FIRM AND OTHER AUXILIARY SERVICES LIKE CONSIGNMENT, SALES AGENT, ETC., THEN THE FIRM WOULD NOT HAVE BEEN ABLE TO FUNCTION AND ACHIE VE A TURNOVER OF THIS QUANTUM. FROM THE FACTS AND CIRCUMSTANCES OF THE CA SE AND CORROBORATIVE EVIDENCES, IT CAN BE INFERRED THAT THE ASSESSEE HAS PROVIDED SERVICES TO THE FIRM ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 5 - IN LIEU OF WHICH IT HAS RECEIVED REMUNERATION OF RS .48.00 CRORES. THIS AMOUNT WAS THEREFORE REQUIRED TO BE TREATED AS INCOME OF T HE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE IS ALSO SILENT ON THE ASPECT OF THE BASIS OF CONSIDERING THE PAYMENT AS REMUNERATION AUTHORIZED BY THE PARTNERSHIP DEED. HERE, NO SUCH CLAUSE IS INCLUDED IN THE PARTNERSHIP DEED DATED 01.03.2007 EXECUTED BETWEEN THREE PARTIES NAMELY THE ASSESSEE, CADILA HEALTHCARE STAFF WELFARE TRUST AND GERMAN REMEDIES LTD. THE AMOUNT I S PAID AS PER A SEPARATE AGREEMENT IN THE FORM OF MOU DATED 15.03.2008 EXECU TED AT THE FAG END OF THE FINANCIAL YEAR. AN UNSIGNED COPY OF THIS MOU IS FOU ND IN THE ASSESSMENT RECORD. THE AO HAS CLEARLY ERRED IN NOT VERIFYING T HE TYPICAL FACTS OF THE CASE AND NOT CONDUCTING THE REQUISITE INQUIRIES TO ASCER TAIN THE TAX EVASION, IF ANY. BY MISUSE OF THE PROVISIONS OF SECTION 40(B) AND 28 (V) OF THE ACT. 8. CONSIDERING THE ABOVE FACTS AND FINDINGS, IT IS EVI DENT THAT THE AO HAS NEITHER EXAMINED THE ISSUE INVOLVED NOR CONDUCTED NECESSARY INQUIRIES ON THE SAME. THE AO HAS THUS ERRED IN NOT BRINGING TO TAX THE AMOUNT OF RS.48,00,00,000/- RECEIVED BY THE ASSESSEE FROM THE FIRM AS PER THE AGREEMENT EXECUTED WITH THE FIRM. AS A RESULT THEREOF, THERE WAS SUBSTANTIAL LOSS OF REVENUE TO THE EXCHEQUER SINCE THE AMOUNT OF RS.48,00,00,00 0/- WAS NEITHER TAXED IN THE CASE OF THE ASSESSEE NOR THE FIRM ZYDUS HEALTHCARE, SIKKIM WHICH ADDED BACK THE SAID EXPENSE AND THEN CLAIMED DEDUCTION U/S 80I C ON THE ENHANCED INCOME. THE ASSESSMENT ORDER IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE IN TERMS OF PROVISIONS OF SECTION 26 3 OF THE ACT. ACCORDINGLY, IT IS HELD THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 144C(5) DATED 23-01- 2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F REVENUE. HENCE, THE SAID ASSESSMENT IS HEREBY CANCELLED AND THE AO IS DIRECT ED TO MAKE FRESH ASSESSMENT IN ACCORDANCE WITH LAW AFTER GIVING PROPER OPPORTUN ITY TO THE ASSESSEE. 5. HEARD BOTH SIDES. CASE FILE PERUSED. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE APPELLANT HOLDS 96% STAKE IN A SIKKIM BASED PARTNERSHIP FIRM M/S. ZYDUS HEALTHCARE. THIS LATTER ENTITY IS ADMIT TEDLY ENTITLED FOR SECTION 80IC DEDUCTION. IT PAID THE REMUNERATION SUM IN QU ESTION OF RS.48CRORES FOR HAVING DEPLOYED ALL OF ITS INFRASTRUCTURE IN THE NA TURE OF DEALERS NETWORK AS WELL AS SERVICES. THIS PAYER ENTITY FURTHER DISALL OW THE ABOVE REMUNERATION HIT BY SECTION 40A(B) OF THE ACT SINCE THE PAYEE AS SESSEE COMES UNDER EXPLANATION 4 THEREIN. THERE IS ALSO NO QUARREL TH AT THE ASSESSEE SOUGHT TO COVER THE SAME U/S.28(V) R.W. PROVISO THERETO ENVIS AGING A CORRESPONDING ADJUSTMENT IN CASE THE SUM IN QUESTION RECEIVED AS REMUNERATION AS IN FACT OF THE INSTANT CASE IS DISALLOWED U/S.40A(B) OF THE AC T. LEARNED PCIT IS OF THE VIEW THAT THE ASSESSING OFFICER OUGHT TO HAVE CONDU CTED ALL NECESSARY ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 6 - INQUIRIES SO AS TO PIERCE THE CORPORATE VEIL CAUSIN G SUBSTANTIAL LOSS TO REVENUES INTEREST. LEARNED DEPARTMENTAL REPRESENT ATIVE PLACES BEFORE US COPY OF ASSESSING OFFICERS ASSESSMENT ORDER FOR AS SESSMENT YEAR 2010-11 DISALLOWING A SIMILAR ADJUSTMENT U/S.28(V) OF THE A CT AMOUNTING TO RS.170CRORES. HE PLEADS US TO FOLLOW THE VERY COUR SE OF ACTION HEREIN AS WELL. 6. WE PROCEED IN THIS BACKDROP OF FACTS TO NOTICE F IRST OF ALL THAT THERE IS NO FORCE IN LEARNED PCIT FORMER REASON HOLDING THAT THE ASSESSING OFFICER FAILED TO CONDUCT ANY ENQUIRY BEFORE FINALIZING THE ABOVE REGULAR ASSESSMENT. PAGE 20 OF THE PAPER BOOK DULY CONTAINS SECTION 142 (1) NOTICE DATED 07.03.2013 RAISING A SPECIFIC QUERY AT NO.4 AT PAGE 24 THEREBY PROPOSING TO ADD THE SUM IN QUESTION OF RS.48CRORES. THE ULTIMA TE FACT IS THAT HE NOWHERE MADE THE SAID ADDITION IN ABOVE REGULAR ASSESSMENT. WE QUOTE HONBLE BOMBAY HIGH COURTS JUDGMENT IN CIT VS. GABRIEL IND IA LTD. [1993] 203 ITR 108 HOLDING THAT THE MERE FACT THAT AN ASSESSING OF FICER DOES NOT DISCUSS THE RELEVANT ISSUE IN ASSESSMENT ORDER NOWHERE RENDERS THE ASSESSMENT IN QUESTION TO BE A CASE OF NO INQUIRY IN CASE HE HAS EXAMINED THE SAID ISSUE IN THE COURSE OF SCRUTINY. IT IS FURTHER EVIDENT THAT A CO-ORDINATE BENCH IN ASSESSEES CASE ITSELF REPORTED THAT [2015] 67 SOT 188 (AHMEDABAD-TRIBUNAL) HAS ALREADY REVERSED AN IDENTICAL EXERCISE OF SECTI ON 263 JURISDICTION IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR BY HOLDING THAT THE ASSESSING OFFICER HAD DULY CONDUCTED THE NECESSARY INQUIRY BEFORE FIN ALIZING THE SAID REGULAR ASSESSMENT. 7. WE FURTHER DEEM IT APPROPRIATE TO DEAL WITH MERI TS OF THE ISSUE AS TO WHETHER THE ASSESSEES REMUNERATION IN QUESTION COU LD BE HELD TO BE INCOME FROM OTHER SOURCES OR ATTEMPT TO CAUSE SUBSTANTIAL LOSS TO THE REVENUE. WE NOTICE HEREIN AS WELL THAT THE ASSESSEES PAYER HAS ALREADY DISALLOWED THE SUM IN QUESTION OF RS.48CRORES (SUPRA). LEARNED COUNSE L FILES BEFORE US COPY OF ITA NO. 2713/AHD/2015 (CADILA HEALTHCARE LTD. VS. P CIT) A.Y. 2009-10 - 7 - ITS ASSESSMENT ORDER IN SCRUTINY ACCEPTING THE SAID DISALLOWANCE. WE OBSERVE IN THESE PECULIAR FACTS THAT IT WOULD NOT BE PROPER FOR THE REVENUE TO ADOPT DIFFERENT COURSE OF ACTION IN CASE OF A PAYER AND A PAYEE SINCE THE ASSESSEE IS ENTITLED TO MAKE CORRESPONDING ADJUSTMENT U/S. 28(V ) OF THE ACT. WE ACCORDINGLY FIND FORCE IN ASSESSEES ARGUMENTS CHAL LENGING LEARNED PCITS ORDER PASSED U/S.263 OF THE ACT. THE SAME IS THERE FORE REVERSED. 8. THE ASSESSEE SUCCEEDS IN ITS INSTANT APPEAL. [PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF MARCH, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 16/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0