MYLAN PHARMACEUTICALS P.LTD, MUMBAI V. ASST CIT 6(3), MUMBAI

ITA 3307/MUM/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7346 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Depreciation; Tax effect; Capital expenditure
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5201/MUM/2011(A.Y. 2005-06) ACIT, CIR.6(3), ROOM NO.522, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ...... APPELLANT VS. M/S. MYLAN PHARMACEUTICAL PVT. LTD. (FORMERLY MYLAN INDIA PVT. LTD.) 7 TH FLOOR, SHIVSAGAR ESTATE, A DR.ANNIE BESANT ROAD, WORLI, MUMBAI 400 018 PAN: AABCM 9323J ..... RESPONDENT ITA NO.5064/MUM/2011(A.Y.2005-06) ITA NO.5065/MUM/2011(A.Y.2006-07) ITA NO.3307/MUM/2013(A.Y.2008-09) M/S. MYLAN PHARMACEUTICAL PVT. LTD. (FORMERLY MYLAN INDIA PVT. LTD.) 7 TH FLOOR, SHIVSAGAR ESTATE, A DR.ANNIE BESANT ROAD, WORLI, MUMBAI 400 018 ..... APPELLANT VS. ACIT, CIR.6(3), ROOM NO.522, 5 TH FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 ...... RESPONDENT REVENUE BY : SHRI S.K.JAIN ASSESSEE BY : MS. CHANDNI SHAH DATE OF HEARING : 17/09/2019 DATE OF PRONOUNCEMENT : 17/10/2019 2 M/S. MYLAN PHARMACEUTICAL PVT. LTD. ORDER PER VIKAS AWASTHY, JM: THESE BUNCH OF FOUR APPEALS COMPRISING OF ONE AP PEAL BY THE REVENUE AND THREE APPEALS BY THE ASSESSEE INVOLVE SIMILAR ISSUES, THEREFORE, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NOS. 5201/MUM/2011(BY REVENUE) & 5064/MUM/2011 (BY ASSESSEE), A.Y.2005-06. 2. THESE CROSS APPEALS BY THE REVENUE AND ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)-12 MUMBAI DATED 10/02/ 2011 FOR ASSESSMENT YEAR 2005-06. 3. MS. CHANDNI SHAH APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED AT THE OUTSET THAT APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN THE LIGHT OF RECENT CBDT CIR CULAR NO.17/2019 DATED 08/08/2019. 4. SHRI S.K.JAIN REPRESENTING THE DEPARTMENT FAIRLY ADMITTED THAT THE ONLY ISSUE RAISED BY THE DEPARTMENT IS ON ACCOUNT O F DEPRECIATION ON EFFLUENT TREATMENT PLANT, THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN RS.50 LAKHS. 5. WE HAVE HEARD BOTH SIDES. THE REVENUE IN ITS AP PEAL HAS ASSAILED THE FINDINGS OF CIT(A) IN ALLOWING RELIEF IN RESPEC T OF DEPRECIATION ON AFFLUENT TREATMENT PLANT RS.55,51,132/-. THE LD. A UTHORIZED REPRESENTATIVE HAS FILED CALCULATION OF TAX EFFECT INVOLVED IN THE APPEAL. 3 M/S. MYLAN PHARMACEUTICAL PVT. LTD. AS PER THE WORKING FURNISHED BY THE LD.AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE, THE TAX EFFECT INVOLVED IN THIS APPEAL I S RS.22,44,284/- INCLUDING SURCHARGE AND EDUCATION CESS. UNDISPUTEDLY, THE T AX EFFECT INVOLVED IN THE APPEAL IS LESS THAN THE MONETARY LIMIT PRESCRI BED BY THE RECENT CBDT CIRCULAR NO. 17/2019, DATED 08-08-2019 FOR FILING O F APPEALS BEFORE THE TRIBUNAL BY THE DEPARTMENT. THE CBDT VIDE CIRCULAR DATED 08-08-2019 (SUPRA) HAS AMENDED PARA 3 OF CIRCULAR NO. 3 OF 201 8 DATED 11-07-2018 THEREBY ENHANCING MONETARY LIMIT OF TAX EFFECT FROM RS.20 LAKHS TO RS.50 LAKHS FOR FILING OF APPEALS BY THE DEPARTMENT BEFOR E THE TRIBUNAL. THUS, WITHOUT GOING INTO MERIT OF THE ISSUES RAISED IN TH E APPEAL, IN VIEW OF RECENT CBDT CIRCULAR (SUPRA) THE PRESENT APPEAL BY THE REVENUE IS DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 6. BEFORE PARTING, WE CLARIFY HERE THAT THE REVENU E SHALL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RESTORATION OF APPEAL, WITH THE REQUISITE MATERIAL TO SHOW THAT THE APPEAL IS PROTECTED BY THE EXCEPTIONS PRESCRIBED IN PARA 10 OF THE CIRCULAR DATED 11-07-2 018 AND ITS AMENDMENT DATED 20/08/2018. 6.1 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 7. NOW, WE SHALL TAKE THE APPEAL BY THE ASSESSEE FO R ASSESSMENT YEAR 2005-06. THE ASSESSEE IN THIS APPEAL HAS RAISED FOL LOWING GROUND/ADDITIONAL GROUNDS OF APPEAL:- GROUND-1: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-12 ['THE CIT(A)'] ERRED IN CONFIRMING THE ACTION OF THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(3), MUMBAI ('T HE ACIT') IN TREATING LICENCE 4 M/S. MYLAN PHARMACEUTICAL PVT. LTD. RECEIVED UNDER SERVED FROM INDIA SCHEME AMOUNTING T O RS. 95,60,000/- AS REVENUE RECEIPT. 2. THE APPELLANT PRAYS THAT THE SAID ADDITION OF R S. 95,60,000/- BE DELETED SINCE THE SAME IS CAPITAL IN NATURE. GROUND II: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) ERRED IN TREATING EXPENDITURE INCURRED TOWARDS REPAIRS AND MAINTENANC E AMOUNTING TO RS. 7,53,197/- AS CAPITAL IN NATURE, 2. THE APPELLANT PRAYS TO TREAT THE SAID REPAIRS A ND MAINTENANCE CHARGES AS REVENUE IN NATURE. GROUND III: THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND AND/ OR ALTER ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. ADDITIONAL GROUNDS OF APPEAL:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ('THE CIT(A) ) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER ('THE AO') IN TREATING THE ENTIRE LICENSE GRANTED AMOUNTING TO RS. 95,60,000/- AS TAXABLE IN YEAR UNDER CONSIDE RATION, WITHOUT APPRECIATING THE FACT THAT THIS AMOUNT HAS NOT BEEN UTILISED DURING THE YEAR. THEREFORE , IT IS PRAYED THAT EVEN IF LICENSE GRANT ED UNDER 'SERVED FROM INDIA SCHEME' IS TREATED AS REVENUE RECEIPT AND NOT CAPIT AL RECEIPT, THAN ONLY THE AMOUNT UTILISED DURING THE YEAR OUGHT TO BE TAXED . 8. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT SHE IS NOT PRESSING GROUND NO.1 OF THE APPEAL. 8.1 IN RESPECT OF GROUND NO.2, THE LD. AUTHORIZED R EPRESENTATIVE SUBMITTED THAT THE AUTHORITIES BELOW HAVE MADE ADD ITION OF RS.7,53,197/- HOLDING THE EXPENDITURE INCURRED BY THE ASSESSEE ON REPAIRS AND MAINTENANCE OF CEILING AS CAPITAL EXPENDITURE. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSES SEE HAD INCURRED EXPENDITURE OF RS.4,20,747/- IN REPLACEMENT OF TILE S OF THE LABORATORY. NO NEW ASSET HAD COME INTO EXISTENCE NOR ANY ENDURING BENEFIT HAS BEEN 5 M/S. MYLAN PHARMACEUTICAL PVT. LTD. DERIVED BY THE ASSESSEE . THE EXPENDITURE WAS INCU RRED EXCLUSIVELY ON MAINTENANCE OF THE LABORATORY. THE LD.AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAD ALSO INCURRED EXPENDITURE OF RS.3,32,450/- ON REFURBISHMENT AND RELOCATION OF E XISTING EQUIPMENT TO NEW LOCATION. THE EXPENDITURE WAS INCURRED MERELY FOR RELOCATION OF EXISTING EQUIPMENT AND NO NEW ASSET HAD COME INTO E XISTENCE. THEREFORE, THE EXPENDITURE CANNOT BE HELD ON ACCOUNT OF CAPITA L ACCOUNT. 8.2 IN RESPECT OF ADDITIONAL GROUND OF APPEAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT ASSESSEE WAS GRANTED LICENCE FOR IMPORT TO THE TUNE OF RS.95,60,000/-. THE ASSESSEE IN THE P& L ACCOUNT HAD CREDITED THE AMOUNT OF RS.81,96,366/- I.E. TO THE EXTENT OF BENEFIT CLAIMED IN RESPECT OF ADVANCE LICENCE. THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS MADE ADDITION OF THE DIFFERENCE I.E. R S.13,63,634/- (RS.95,60,000 - RS.81,96,366). THE LD.AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HONBLE APEX COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD.,358 ITR 295(SC) HAS HELD THAT THE B ENEFIT UNDER ADVANCE LICENCE OR DUTY ENTITLEMENT PASS BOOK SCHEME REPR ESENT ONLY HYPOTHETICAL INCOME, WHICH CANNOT BE BROUGHT TO TAX BY APPLYING SECTION 28(IV) OF THE ACT. THUS, IN THE LIGHT OF THE ABOVE JUDGMENT, ONLY TO THE EXTENT OF BENEFIT DERIVED BY THE ASSESSEE ON ADVA NCE LICENCE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPE AL CAN BE BROUGHT TO TAX. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSES SEE STATED THAT THE ASSESSEE HAS ALREADY OFFERED THE AMOUNT TO TAX TO THE EXTENT BENEFIT WAS DERIVED IN THE ASSESSMENT YEAR UNDER APPEAL AND TH E REMAINING AMOUNT TO THE EXTENT OF BENEFIT DERIVED BY THE ASSESSEE WA S OFFERED TO TAX IN THE NEXT ASSESSMENT YEAR. 6 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 8.3 THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSE E FURTHER CONTENDED THAT THE ADDITIONAL GROUND RAISED IN THE APPEAL EMANATES FROM FACTS ALREADY AVAILABLE ON RECORD AND THE ASSESSIN G OFFICER HAS DEALT WITH THIS ISSUE IN THE ASSESSMENT ORDER, HENCE, THE ADDI TIONAL GROUND RAISED IN THE APPEAL SHOULD BE ADMITTED. 9. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENT ATIVE CONTROVERTING THE SUBMISSIONS MADE BY LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE IN RESPECT OF GROUND NO.II SUBMITTED T HAT ASSESSEE NEVER BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT TH E NEW TILES WERE FOR THE REPLACEMENT OF THE EXISTING TILES. THE LD. DEPARTM ENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE FINDINGS OF THE AUTHORITIE S BELOW IN HOLDING THE EXPENDITURE ON REPLACEMENT OF TILES AS CAPITAL EXP ENDITURE. 9.1 IN RESPECT OF ADDITIONAL GROUND RAISED IN THE A PPEAL, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE BENE FIT FROM ADVANCE LICENCE HAS ACCRUED TO THE ASSESSEE IN THE YEAR OF ISSUANCE OF SUCH LICENCE, SINCE, ASSESSEE IS FOLLOWING MERCANTILE SY STEM OF ACCOUNTING, THE ENTIRE AMOUNT OF ADVANCE LICENCE SHOULD HAVE BEEN O FFERED TO TAX IN THE YEAR OF ISSUE OF LICENCE. 10. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE LD.AUT HORIZED REPRESENTATIVE OF THE ASSESSEE STATED AT THE BAR THAT SHE IS NO T PRESSING GROUND NO.1 OF THE APPEAL. IN VIEW OF THE STATEMENT MADE BY LD.AU THORIZED REPRESENTATIVE OF THE ASSESSEE , THE GROUND NO.1 OF THE APPEAL IS DISMISSED AS NOT PRESSED. 7 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 11. IN GROUND NO.II OF THE APPEAL, THE ASSESSEE HA S ASSAILED FINDINGS OF AUTHORITIES BELOW IN TREATING THE EXPENDITURE ON R EPAIRS AND MAINTENANCE AND RELOCATION OF ASSET AS CAPITAL EXPENDITURE. TH E CONTENTION OF THE ASSESSEE IS THAT THE EXPENDITURE OF RS.4,20,747/- H AS BEEN INCURRED ON REPAIRS AND MAINTENANCE OF THE LABORATORY BY WAY OF REPLACEMENT OF TILES. WE OBSERVE THAT IN PROCEEDINGS BEFORE THE CIT(A) , THE ASSESSEE HAD CATEGORICALLY SUBMITTED THAT THE EXPENDITURE WAS IN CURRED ON REPLACEMENT OF PERFORATED CEILING TILES IN THE LABORATORY. I T IS APPARENT FROM RECORDS THAT THE EXPENDITURE WAS INCURRED ON MAINTENANCE OF THE LABORATORY CAUSED DUE TO NORMAL WEAR AND TEAR. NO NEW ASSET H AS COME INTO EXISTENCE, THUS, WE ARE OF THE CONSIDERED VIEW THAT THE EXPENDITURE WAS IN THE NATURE OF REPAIRS AND MAINTENANCE AND NOT ON CA PITAL ACCOUNT. 11.1 FURTHER, THE ASSESSEE HAS CLAIMED EXPENDITURE ON RELOCATION OF EXISTING EQUIPMENT TO NEW EFFLUENT TREATMENT PLANT UNDER THE HEAD REPAIRS AND MAINTENANCE. THE REVENUE DISALLOWED AFORESAID EXPENDITURE ON THE PREMISE THAT ASSESSEE WOULD HAVE GOT ENDURING BENEFIT BY RELOCATION OF THE EQUIPMENT AND HENCE, T HE EXPENDITURE IS CAPITAL IN NATURE. WE DO NOT CONCUR WITH THE FINDI NGS OF THE AUTHORITIES BELOW. IT IS NOT DISPUTED BY THE REVENUE THAT THE EQUIPMENT WAS ALREADY IN EXISTENCE. NO NEW PLANT OR MACHINERY WAS PURCHAS ED BY THE ASSESSEE. THE RELOCATION OF THE EXISTING EQUIPMENT BY ANY STR ETCH OF IMAGINATION CANNOT RESULT IN CREATION OF ANY NEW ASSET. AT BEST IT COULD HAVE RESULTED IN EFFICIENT RUNNING OF THE PLANT AND MACHINERY. T HUS, THE EXPENDITURE ON RELOCATION OF EXISTING EQUIPMENT IS REVENUE IN NA TURE. IN THE RESULT, GROUND NO.II RAISED BY THE ASSESSEE IS ALLOWED. 8 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 12. GROUND NO.III OF THE APPEAL IS GENERAL IN NATUR E AND HENCE, REQUIRE NO ADJUDICATION. 13. THE ASSESSEE HAS RAISED ADDITIONAL GROUND OF AP PEAL IN TREATING THE ENTIRE ADVANCE LICENCE AMOUNT OF RS.95,60,000/- AS TAXABLE IN THE ASSESSMENT UNDER APPEAL. THE ASSESSEE HAS UTILIZED LICENCE TO THE TUNE OF RS.81,96,366/- AND HAS OFFERED THE SAME TO TAX. TH E ASSESSEE HAS UTILIZED THE REMAINING AMOUNT IN THE NEXT ASSESSMENT YEAR. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE STATED AT THE BAR T HAT IN THE NEXT ASSESSMENT YEAR ASSESSEE HAS OFFERED TO TAX THE AM OUNT TO THE EXTENT LICENCE BENEFIT HAS BEEN UTILIZED IN THE PERIOD RE LEVANT TO SUCCEEDING ASSESSMENT YEAR. THE HON'BLE APEX COURT IN THE CAS E OF CIT VS. EXCEL INDUSTRIES LTD.(SUPRA) HAD AN OCCASION TO DEAL WITH THE ISSUE OF TAXABILITY OF BENEFIT OBTAINED BY THE ASSESSEE THROUGH ADVANCE LICENCE. THE QUESTION FOR ADJUDICATION BEFORE THE HONBLE APEX COURT WAS: 2. THE QUESTION TOR CONSIDERATION IN ALL THESE APPE ALS IS WHETHER THE BENEFIT OF AN ENTITLEMENT TO MAKE DUTY FREE IMPORTS OF RAW MATERI ALS OBTAINED BY THE ASSESSEE THROUGH ADVANCE LICENCES AND DUTY ENTITLEMENT PASS BOOK ISSUED AGAINST EXPORT OBLIGATIONS IS INCOME IN THE YEAR IN WHICH THE EXPO RTS ARE MADE OR IN THE YEAR IN WHICH THE DUTY FREE IMPORTS ARE MADE. 14. THE HONBLE COURT ANSWERED THE QUESTION IN FAVO UR OF THE ASSESSEE AFTER CONSIDERING THE DECISIONS RENDERED IN THE CAS ES OF CIT VS SHOORJI VALLABHDAS & CO.,46 ITR 144(SC), MORVI INDUSTRIES LTD. 82 ITR 835(SC) AND THE PROVISIONS OF SECTION 28(IV) OF THE ACT THE HO NBLE COURT OBSERVED AS UNDER:- 20. IT FOLLOWS FROM THESE DECISIONS THAT INCOME AC CRUES WHEN IT BECOMES DUE BUT IT MUST ALSO BE ACCOMPANIED BY A CORRESPONDING LIABILI TY OF THE OTHER PARTY TO PAY THE AMOUNT. ONLY THEN CAN IT BE SAID THAT FOR THE PURPO SES OF TAXABILITY THAT THE INCOME IS NO! HYPOTHETICAL AND IT HAS REALLY ACCRUED TO THE A SSESSEE. 9 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 21. IN SO FAR AS THE PRESENT CASE IS CONCERNED, EVE N IF IT IS ASSUMED THAT THE ASSESSEE WAS ENTITLED TO THE BENEFITS UNDER THE ADVANCE LICE NCES AS WELL AS UNDER THE DUTY ENTITLEMENT PASS BOOK, THERE WAS NO CORRESPONDING L IABILITY ON THE CUSTOMS AUTHORITIES TO PASS ON THE BENEFIT OF DUTY FREE IMPORTS TO THE ASSESSEE UNTIL THE GOODS ARE ACTUALLY IMPORTED AND MADE AVAILABLE FOR CLEARANCE. THE BENE FITS REPRESENT, AT BEST, A HYPOTHETICAL INCOME WHICH MAY OR MAY NOT MATERIALIS E AND ITS MONEY VALUE IS THEREFORE NOT THE INCOME OF THE ASSESSEE. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 27. APPLYING THE THREE TESTS LAID DOWN BY VARIOUS D ECISIONS OF THIS COURT, NAMELY, WHETHER THE INCOME ACCRUED TO THE ASSESSEE IS REAL OR HYPOTHETICAL; WHETHER THERE IS A CORRESPONDING LIABILITY OF THE OTHER PARTY TO PASS ON THE BENEFITS OF DUTY FREE IMPORT TO THE ASSESSEE EVEN WITHOUT ANY IMPORTS HAV ING BEEN MADE; AND THE PROBABILITY OR IMPROBABILITY OF REALIZATION OF THE BENEFITS BY THE ASSESSEE CONSIDERED FROM A REALISTIC AND PRACTICAL POINT OF VIEW (THE ASSESSEE MAY NOT HAVE MADE IMPORTS), IT IS QUITE CLEAR THAT IN FACT NO RE AL INCOME BUT ONLY HYPOTHETICAL INCOME HAD ACCRUED TO THE ASSESSEE AND SECTION 28(I V) OF THE ACT WOULD BE INAPPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE EASE. ESSENTIALLY, THE ASSESSING OFFICER IS REQUIRED TO BE PRAGMATIC AND NOT PEDANTI C. THUS IN VIEW OF THE LAW LAID DOWN BY THE HON'BLE AP EX COURT, IT IS UNAMBIGUOUSLY CLEAR THAT IT IS ONLY TO THE EXTENT T HAT ASSESSEE HAS DERIVED BENEFITS FROM THE LICENCE DURING THE IMPUGNED ASSES SMENT YEAR AND THE AMOUNT IS CHARGEABLE TO TAX. 15. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESS EE HAS STATED AT THE BAR THAT IN THE SUBSEQUENT ASSESSMENT YEAR ASSESSE E HAS OFFERED TO TAX THE AMOUNT TO THE EXTENT BENEFIT IS DERIVED UNDER THE LICENCE. HENCE, THE REVENUE IS NOT DEPRIVED OF TAX ON THE BENEFIT DERI VED BY ASSESSEE FROM ADVANCE LICENCE. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE DECISION OF HON'BLE APEX COURT, WE FIND MERIT IN THE CONTENTION S OF THE ASSESSEE. ACCORDINGLY, THE ADDITIONAL GROUND RAISED BY THE AS SESSEE IN THE APPEAL IS ALLOWED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE TERMS AFORESAID. 10 M/S. MYLAN PHARMACEUTICAL PVT. LTD. ITA NO.5065/MUM/2011, A.Y.2006-07: 17. THE ASSESSEE IN APPEAL HAS RAISED TWO GROUNDS A ND AN ADDITIONAL GROUND OF APPEAL. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.1 OF TH E APPEAL. ACCORDINGLY, THE SAME IS DISMISSED AS SUCH. 18. THE GROUND OF APPEAL NO.2 IS GENERAL IN NATURE, HENCE, REQUIRES NO ADJUDICATION. 19. THE ADDITIONAL GROUND OF APPEAL IS SIMILAR TO T HE ADDITIONAL GROUNDS OF APPEAL RAISED IN ASSESSMENT YEAR 2005-06. THE LD.AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT DURI NG THE FINANCIAL YEAR 2005-06 ASSESSEE HAD RECEIVED LICENCE UNDER SERVED FROM INDIA SCHEME FOR RS.1,06,98,450/-. DURING THE FINANCIAL YEAR 20 05-06, ASSESSEE DERIVED BENEFIT OF RS.64,97,737/- AND OFFERED THE SAME TO T AX. HOWEVER, THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS MADE AN ADDITION OF THE REMAINING AMOUNT I.E. RS.42,00,713/- ( RS.1,06,98,4 50 - RS.64,97,737). THE FACTS IN THE ASSESSMENT YEAR UNDER CONSIDERATI ON ARE IDENTICAL TO THE FACTS IN ASSESSMENT YEAR 2005-06. 20. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY ADMI TTED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER IN ASSESSME NT YEAR 2006-07 ARE FOR THE SIMILAR REASONS AS WERE MADE IN ASSESSMENT YEAR 2005-06. 21. BOTH SIDES HEARD. THE ISSUE RAISED BY THE ASSE SSEE IN ADDITIONAL GROUND OF APPEAL IS IDENTICAL TO THE ONE WE HAVE AL READY ADJUDICATED WHILE DECIDING THE APPEAL OF THE ASSESSEE IN ASSESSMENT Y EAR 2005-06. THE 11 M/S. MYLAN PHARMACEUTICAL PVT. LTD. DETAILED FINDINGS GIVEN BY US THEREIN SHALL APPLY MUTATIS MUTANDIS IN THE FACTS OF PRESENT APPEAL AS WELL. ACCORDINGLY, THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 20 06-07 IS ALLOWED IN SIMILAR TERMS. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.3307/MUM/2013,A.Y.2008-09: 23. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT THE ASSESSEE IN THIS APPEAL HAS RAISED FIVE GROUND S. THE ASSESSEE IS NOT PRESSING GROUND NO.1. 23.1 THE GROUND NO.2 OF THE APPEAL IS IN RESPECT OF ADDITION MADE ON ACCOUNT OF BENEFIT DERIVED FROM THE LICENCE. THE A SSESSEE WAS ISSUED LICENCE UNDER THE SCHEME FOR THE BENEFIT OF RS.1,86 ,35,364/-. DURING THE FINANCIAL YEAR 2007-08 ASSESSEE COULD NOT USE THE L ICENCE AND HENCE NIL AMOUNT WAS OFFERED TO TAX IN RESPECT OF LICENCE BEN EFIT. THE ASSESSING OFFICER MADE ADDITION OF THE ENTIRE AMOUNT. THE LD . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE SUBMISSIONS MADE IN ASSESSMENT YEAR 2005-06 EQUALLY APPLY TO THE ASSE SSMENT YEAR UNDER APPEAL. THE LD. AUTHORIZED REPRESENTATIVE SUBMITT ED THAT GROUND NO.3 OF THE APPEAL IS AN ALTERNATE CLAIM AND IN CASE THE GROUND NO.2 IS ACCEPTED, GROUND NO.3 WOULD BECOME INFRUCTUOUS. 24. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE FACTS IN THE ASSESSMENT YEAR 2008-09 QUA GROUND NO.2 ARE SIM ILAR T ADDITIONAL GROUND RAISED IN ASSESSMENT YEAR 2005-06 AND 2006-0 7. 12 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 25. BOTH SIDES HEARD. THE LD.AUTHORIZED REPRESENTA TIVE OF THE ASSESSEE HAS STATED AT THE BAR THAT SHE IS NOT PRESSING GRO UND NO.1 OF THE APPEAL, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 26. THE GROUND NO.2 OF THE APPEAL IS WITH RESPECT T O ADDITION MADE ON ACCOUNT OF LICENCE AMOUNT RS.1,886,35,364/-. UND ISPUTEDLY, THE ASSESSEE HAS NOT UTILIZED LICENCE FOR IMPORT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL AND HENCE, THE ASS ESSEE HAS NOT OFFERED ANY INCOME FROM IMPORT OF CAPITAL GOODS IN RESPECT OF THE LICENCE IN THE YEAR UNDER APPEAL. WE HAVE CONSIDERED THIS ISSUE AND ADJUDICATED THE SAME IN DETAIL IN ASSESSMENT YEAR 2005-06. THE FINDINGS GIVEN BY US WOULD APPLY MUTATIS MUTANDIS TO ASSESSMENT YEAR 2008-09 AS WELL. FOR THE DETAILED REASONS GIVEN IN ASSESSMENT YEAR 2005 -06, GROUND NO.2 OF THE PRESENT APPEAL IS ALLOWED. 27. IN GROUND NO.3 OF THE APPEAL THE ASSESSEE HAS RAISED AN ALTERNATE CLAIM IN RESPECT OF LICENCE AMOUNT. SINCE, WE HAVE ALLOWED GROUND NO.2 OF THE APPEAL, THE ALTERNATE CLAIM MADE BY THE ASSE SSEE IN GROUND NO.3 HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTUOUS. 28. IN GROUND NO.4 ASSESSEE HAS ASSAILED CHARGING O F INTEREST UNDER SECTION 220(2) OF THE ACT. THE CHARGING OF INTERES T IS CONSEQUENTIAL AND MANDATORY, HENCE, GROUND NO.4 IS DISMISSED. 29. THE GROUND NO.5 OF THE APPEAL IS GENERAL IN NAT URE AND HENCE, REQUIRES NO ADJUDICATION. 13 M/S. MYLAN PHARMACEUTICAL PVT. LTD. 30. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 31. TO SUM UP, THE APPEAL OF THE REVENUE IS DISMISSED AN D APPEALS OF THE ASSESSEE FOR ASSESSMENT YEAR 2005-06, 2006-07 AN D 2008-09 ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY TH E 17TH DAY OF OCTOBER 2019. SD/- SD/- (RAJESH KUMAR ) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 17/10/2019 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI