THE ACIT CEN CIR-33, MUMBAI V. M/S. GLENMARK PHARMACEUTICALS LTD, MUMBAI

ITA 4781/MUM/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2631 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-11-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 03-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAGATI KUMAR
• Keywords: Business income; Principle of natural justice; Revised return; Capital expenditure
• Section: 80IA; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI P.M.JAGTAP, AM & SMT. P.MADHAVI DEVI, JM I.T.A.NOS.4781 & 4782/MUM/2007 A.YS. 1999-2000 & 2001-02 ASST. COMMISSIONER OF I.T. CENTRAL CIRCLE 33 MUMBAI VS. M/S GLENMARK PHARMACEUTICALS LTD. B/2, MAHALAXMI CHAMBERS-22 BHULABHAI DESAI ROAD, MUMBAI 400 026 AAACG 2207 L (APPELLANT) (RESPONDENT) AND I.T.A.NO.4433/MUM/2007 - A.Y 1999-2000 M/S GLENMARK PHARMACEUTICALS LTD. MUMBAI VS. ASST. C.I.T., CENTRAL CIRCLE 33 MUMBAI [ APPELLANT] [RESPONDENT] REVENUE BY : S/SHRI PRAGATI KUMAR & MOHD.USMAN ASSESSEE BY : SHRI VIJAY MEHTA. O R D E R PER P.MADHAVI DEVI, JM: THESE CROSS APPEALS ARE DIRECTED AGAINST CIT[A] S SEPARATE ORDERS FOR A.YS.1999-2000, 2001-02 & 1999-2000 RESP ECTIVELY. 2. I.T.A.NO.4781/M/81 [REVENUES APPEAL] A.Y 99-00 : THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS AGAINST THE ORDER OF THE CIT[A] IN DIRECTING THE AO TO ALLOW THE CLAIM OF T HE ASSESSEE COMPANY U/S.80IA OF THE ACT WITHOUT APPRECIATING THAT THERE IS A HUGE VARIATION IN THE PROFITS DECLARED BY THE ASSESSEE COMPANY IN RESPECT OF ELIGIBLE AND NON-ELIGIBLE UNITS U/S.80IA OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING PHARMACEUT ICALS. IT FILED ITS 2 RETURN OF INCOME DECLARING TOTAL INCOME OF RS.11,14 ,45,672/-. THE SAME WAS PROCESSED U/S.143[1] ACCEPTING THE INCOME DECLARED BY THE ASSESSEE. HOWEVER, AO SUBSEQUENTLY NOTED THAT THE I NCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND THEREFORE AFTER RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT AND ISSUING NOTICE U/S.148 OF THE INCOME TAX ACT, HE REOPENED THE ASSESSMENT U/S. 147 OF THE ACT. DURING THE RE-ASSESSMENT PROCEEDINGS, AO OBSERVED T HAT THE ASSESSEE HAS CLAIMED DEDUCTION AMOUNTING TO RS.1,64,81,392/- DURING THE YEAR UNDER CONSIDERATION. HE FURTHER OBSERVED THAT THERE WAS SOME DISCREPANCY IN THE GP RATIOS OF THE 80IA AND NON-80 IA UNITS. HE ALSO OBSERVED THAT THE EXPENSES ALLOCATION WAS NOT PROPE R WHICH HAS RESULTED IN A HIGHER PROFIT PERCENTAGE IN THE 80IA UNIT. HE THEREFORE ASKED THE ASSESSEE TO SUBSTANTIATE ITS CLAIM THAT T HE EXPENDITURE ALLOCATION WAS DONE PROPERLY. IN RESPONSE TO THE SA ME, ASSESSEE FILED ITS SUBMISSIONS STATING THAT THE EXPENSES APPORTION ED AMONGST THE UNITS AND THE PROFIT DECLARED IN GOA UNIT ARE TRUE AND CORRECT. ASSESSEE ALSO GAVE COMPARISON OF THE GP DECLARED OF THE GOA UNIT AT 47.97% AS AGAINST GP OF OTHER UNIT AT 34.38%. AFTER CONSIDERI NG THE ASSESSEES SUBMISSIONS, AO HELD THAT THE ASSESSEES SUBMISSION IS NOT CONVINCING TO ACCEPT THE RATIO OF PROFIT SHOWN IN GOA UNIT. HE THEREFORE HELD THAT THE CLAIM OF DEDUCTION U/S.80IA AS MADE BY THE ASSE SSEE ON GOA UNIT IS NOT ALLOWABLE AND RESTRICTED THE SAME TO RS.56,6 5,126/- AND COMPUTED THE INCOME ACCORDINGLY. 4. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE C IT[A] REITERATING THE SUBMISSIONS MADE BEFORE THE AO AS W ELL AS GIVING 3 DETAILED REASONS FOR THE DIFFERENCE IN GP RATIO OF THE UNITS ELIGIBLE FOR DEDUCTION U/S.80IA AND OTHER UNITS. IT WAS SUBMITTE D THAT THE UNITS ARE DISTINCT AND NOT COMPARABLE AS THE GOA UNIT MANUFAC TURES ONLY TABLETS AND CAPSULES, WHEREAS THE OTHER UNITS MANUFACTURE V ARIOUS OTHER PRODUCTS LIKE LOTIONS AND EXTERNALS, OINTMENTS ETC. AND TABLETS AND CAPSULES FORM ONLY 28.15% OF THE TOTAL SALES FROM T HE NON ELIGIBLE UNITS. THE ASSESSEE SUBMITTED A CHART GIVING THE PR ODUCT-WISE PROFIT MARGINS FOR THE NON ELIGIBLE UNITS AND ALSO THAT TH E TURNOVER OF THE GOA UNIT WAS HARDLY 10% OF THE TOTAL TURNOVER OF THE AS SESSEE COMPANY. IT WAS ALSO SUBMITTED THAT GOA UNIT WAS ESTABLISHED IN THE YEAR 1996-97 AND THEREFORE THERE WERE ADDED ADVANTAGES OF LATEST EQUIPMENT AND MODERN TECHNOLOGY RESULTING INTO LOW REPAIRS AND MA INTENANCE COST, LOW MATERIAL CONSUMPTION ETC. RESULTING IN A HIGHER GP. IT WAS ALSO SUBMITTED THAT SEPARATE SET OF AUDITED BOOKS ARE MA INTAINED BY THE ASSESSEE FOR THE ELIGIBLE AS WELL AS NON ELIGIBLE U NITS AND THAT THE EXPENDITURE HAS BEEN PROPERLY ALLOCATED TO THE UNIT S BY ALLOCATING THE DIRECT EXPENSES INCURRED FOR A UNIT TO THAT PARTICU LAR UNIT ONLY AND COMMON EXPENSES ARE ALLOCATED IN PROPORTION TO SALE MADE BY EACH UNIT. AFTER CONSIDERING THE DETAILED SUBMISSIONS MA DE BY THE ASSESSEE JUSTIFYING THE DIFFERENCE IN THE GP RATIO OF GOA UN IT AND OTHER UNITS, THE CIT[A] HAS HELD THAT THE AO HAS NOT POINTED OUT AN Y DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AN D HAS ALSO NOT POINTED OUT ANY PARTICULAR ITEM OF COMMON EXPENDITU RE, WHICH THE ASSESSEE HAS NOT PROPERLY ALLOCATED. HE HELD THAT T HERE IS BOUND TO BE SOME VARIATION IN PROFITS BETWEEN THE DIFFERENT PRO DUCTS MANUFACTURED 4 AND BETWEEN THE DIFFERENT UNITS DUE TO VARIOUS FACT ORS. HE, THUS, HELD THAT THE AO HAS ALLOCATED THE PROFIT AMOUNT OF EACH UNIT ON THE BASIS THAT THE NET PROFIT RATIO OF ALL THE UNITS IS THE S AME BY ADOPTING AN ADHOC METHOD WHICH IS NOT CORRECT. HE THEREFORE HEL D THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80IA OF THE ACT IS T O BE ALLOWED. HE ALSO MADE A REFERENCE TO THE ORDER OF HIS PREDECESSOR IN THE ASSESSEES OWN CASE FOR THE YEAR 1998-99 WHEREIN SIMILAR ADJUSTMEN T WAS DELETED. AGGRIEVED BY THE RELIEF GIVEN BY THE CIT[A] , THE R EVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR PLACED STRONG RELIANCE UPON THE ORDER OF THE AO WHILE THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIA NCE UPON THE ORDER OF THE CIT[A] AND DREW OUR PARTICULAR ATTENTION TO TH E RELEVANT PORTION OF THE ORDER OF THE CIT[A] WHEREIN THE ASSESSEES SUB MISSIONS HAVE BEEN RECORDED. 6. AFTER HEARING BOTH THE PARTIES AND HAVING CONSID ERED THE RELEVANT MATERIAL PLACED ON RECORD, WE FIND THAT TH E ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IA OF THE ACT WITH REGARD TO IT S GOA UNIT. THE REASONS FOR THE DISALLOWANCE MADE BY THE AO IS THAT THE GOA UNIT HAD SHOWN HIGHER GP RATE AS COMPARED TO THE OTHER NON E LIGIBLE UNITS. THE ASSESSEE HAS GIVEN DETAILED REASONING AS TO WHY THE DIFFERENCE IN THE GP RATIO OF ELIGIBLE AS WELL AS NON ELIGIBLE UNITS HAS ARISEN. AS RIGHTLY POINTED OUT BY THE CIT[A] , THE AO HAS NOT POINTED OUT ANY SPECIFIC ITEMS OF EXPENDITURE WHICH HAS NOT BEEN PROPERLY AL LOCATED BY THE ASSESSEE TO ALL THE UNITS. THE REASONING GIVEN BY T HE ASSESSEE FOR THE DIFFERENCE IN THE GP RATIO IS ALSO ACCEPTABLE AND T HE LD. DR HAS NOT 5 BEEN ABLE TO POINT OUT ANY EVIDENCE REBUTTING THE F INDING OF THE CIT[A]. IN VIEW OF THE SAME, WE DO NOT SEE ANY REAS ON TO INTERFERE WITH THE ORDER OF THE CIT[A] AND THE REVENUES APP EAL IN I.T.A.NO.4781/M/07 FOR A.Y 1999-2000 IS DISMISSED. 7. I.T.A.NO.4433/M/07 [ASSESSEES APPEAL] A.Y 99-00 : THE ASSESSEE AS RAISED THE FOLLOWING GROUNDS OF APPEAL- 1) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE IMPUGNED ASSES SMENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER, WHIC H WAS ILLEGAL AND BAD IN LAW. 2) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN PASSING THE ORDER U/S.250 OF THE ACT IN GROSS VIOLATIONS OF PRINCIPLES OF NATURAL JUSTICE. 3) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT THE ASSESSING O FFICER HAS VALIDLY ASSUMED THE JURISDICTION UNDER SECTION 147 AND RE- OPENED THE CASE FOR ISSUE COVERING EXCESS DEDUCTION CLAIMED U/S.80IA AND FOR ISSUE COVERING INCLUDING OF EXCISE DUTY AND MODVAT RECEIVABLE IN VALUATION OF CLOSING STOCK OF FINISHED GOODS AND RAW MATERIALS. 4) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN HOLDING THAT WHILE COMPUTING PROFITS O F THE BUSINESS FOR THE PURPOSE OF SECTION 80HHC, DEDUCTION ALLOWAB LE U/S.80IA SHOULD BE REDUCED. 5) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN CHARGING INTEREST U/S.234B & 234C OF THE ACT. 6) THE HON'BLE COMMISSIONER OF INCOME-TAX [APPEALS] HAS ERRED IN LAW AND IN FACTS IN INITIATING PENALTY PROCEEDIN GS U/S.271[1][C] OF THE ACT. 8. AS REGARDS GROUNDS OF APPEAL NOS.1 & 2, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THEY ARE GENERAL IN NATURE AND HENCE NEEDS NO ADJUDICATION. THEY ARE ACCORDINGLY REJECTED. 9. AS REGARDS GROUND NO.3 RELATING TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT U/S.147 OF THE ACT FOR THE EXCESS DEDUCTION CLAIMED U/S.80IA OF THE ACT, WE FIND THAT THIS GROUND ALSO NEEDS NO ADJUDICATION IN VIEW OF OUR UPHOLDING THE FINDING O F THE CIT[A] THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IA AS CLAIMED BY THE 6 ASSESSEE THAT NO DISALLOWANCE IS TO BE MADE THEREF ROM. THIS GROUND IS ACCORDINGLY REJECTED. 10. AS REGARDS GROUND NO.4, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED THAT THIS ISSUE IS COVERED AGAINST THE ASS ESSEE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN MINT REPORTED IN 119 ITD 107. THIS GROUND IS ACCORDINGLY REJECTED. 11. AS REGARDS GROUND NO.5, WE FIND THAT THIS IS CO NSEQUENTIAL IN NATURE AND THE AO IS DIRECTED TO GIVE CONSEQUENTIAL RELIEF TO THE ASSESSEE ACCORDINGLY. 12. GROUND NO.6 IS PREMATURE AND IS ACCORDINGLY REJ ECTED. 13. IN THE RESULT, ASSESSEES APPEAL IN I.T.A.NO.44 33/M/07 IS PARTLY ALLOWED. 14. I.T.A.NO.4782/M/07 [REVENUES APPEAL] A.Y 2001-02 : IN THIS APPEAL, THE ONLY GRIEVANCE OF THE REVENUE I S AGAINST THE ORDER OF THE CIT[A] IN DIRECTING THE AO TO ALLOW THE CLAIM OF THE ASSESSEE U/S.35[1][IV] OF THE INCOME TAX ACT AMOUNTING TO RS .8,93,64,936/- IN RESPECT OF CAPITAL EXPENDITURE INCURRED FOR THE CON STRUCTION OF BUILDING FOR THE PURPOSE OF RESEARCH WITHOUT APPRECIATING TH AT THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SEC.35[2AB] OF TH E INCOME TAX ACT FOR DISALLOWING THE CLAIM OF THE ASSESSEE. 15. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY FILED ITS RETURN OF INCOME DECLARING LOSS OF RS.27,53,75,569/ - FOR THE RELEVANT ASSESSMENT YEAR ON 31-10-2001. SUBSEQUENTLY ON 31-3 -2003, A REVISED RETURN WAS FILED DECLARING A LOSS OF RS.35,76,96,43 5/-. THE ASSESSMENT WAS COMPLETED U/S.143[3] BY DETERMINING THE LOSS OF RS.22,73,72,726/- 7 UNDER THE NORMAL PROVISIONS OF THE ACT AND INCOME A T RS.18,56,37,310/- U/S.115JB OF THE ACT. THE ASSESSE E CARRIED THE MATTER IN APPEAL TO THE CIT[A] AND AFTER GIVING EF FECT TO THE ORDER OF THE CIT[A], THE TOTAL INCOME OF THE ASSESSEE WAS RE VISED TO [-] RS.25,73,35,535/-. AFTER PERUSAL OF THE RECORDS, AO OBSERVED THAT THE ASSESSEE HAS CLAIMED DEDUCTION AMOUNTING TO RS.8,93 ,64,936/- BEING EXPENDITURE INCURRED IN RESPECT OF BUILDING, WHICH DOES NOT FALL IN THE AMBIT OF ELIGIBLE EXPENDITURE FOR DEDUCTION UNDER S EC.35 OF THE ACT. IN VIEW OF THE SAME, HE REOPENED THE ASSESSMENT BY ISS UANCE OF NOTICE U/S.148 DATED 31-3-2003. THE ASSESSEES EXPLANATIO N WAS CALLED FOR AS TO WHY THE EXPENDITURE ON BUILDING SHOULD NOT BE DI SALLOWED IN VIEW OF THE PROVISIONS OF SEC.35[2AB] OF THE ACT. THE ASSES SEE SUBMITTED THAT THE CLAIM WAS MADE U/S.35[1][IV] AS THE EXPENDITURE IS INCURRED FOR THE PURPOSES OF CONSTRUCTION OF BUILDING AT MAHAPE FOR THE RESEARCH ACTIVITIES OF THE ASSESSEE COMPANY. HOWEVER, AO HEL D THAT THE SAME IS NOT ALLOWABLE U/S.32[AB] OF THE ACT AND ACCORDINGLY COMPUTED THE INCOME OF THE ASSESSEE BY ADDING THE SAID AMOUNT IN THE TOTAL INCOME OF THE ASSESSEE. 16. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE CIT[A] REITERATING THE SUBMISSIONS MADE BEFORE THE AO STAT ING THAT THE CLAIM WAS MADE U/S.35[1][IV] WHICH DOES NOT PROHIBIT ALLO WANCE OF DEDUCTION OF EXPENDITURE INCURRED FOR THE PURPOSE OF CONSTRUC TION OF BUILDING USED FOR THE SCIENTIFIC RESEARCH RELATED TO THE BUS INESS CARRIED ON BY THE ASSESSEE. THE CIT[A] HELD THAT THE PROVISIONS OF SEC.35[1][IV] DO NOT RESTRICT THE PURVIEW OF DEDUCTION AND AS A CONS EQUENCE ALLOWS THE 8 EXPENSES INCURRED FOR CONSTRUCTION OF BUILDING UNLI KE THE PROVISIONS OF SEC.35[2AB] WHICH RESTRICTS THE DEDUCTION TO BE ALL OWED, BY MAKING A CONDITION THAT DEDUCTION SHOULD NOT BE ALLOWED UNDE R THAT SECTION IN RESPECT OF EXPENDITURE INCURRED FOR THE PURPOSE OF LAND OR CONSTRUCTION OF BUILDING. HE OBSERVED THAT SEC.35[2AB] ALLOWS DE DUCTION OF 1.5 TIMES OF THE EXPENSES INCURRED BY THE ASSESSEE FOR RESEARCH AND DEVELOPMENT, [EXCEPT FOR THE EXPENDITURE IN THE NAT URE OF COST OF ANY LAND OR BUILDING] WHEREAS SEC.35[1][IV] ALLOWS DEDU CTION OF 100% OF ANY EXPENDITURE OF A CAPITAL NATURE ON SCIENTIFIC R ESEARCH AND THEREFORE THE SCOPE OF BOTH THE SECTIONS IS DIFFERENT. HE FUR THER HELD THAT THE EXPENDITURE CLAIMED U/S.35[2AB] REQUIRES APPROVAL O F THE PRESCRIBED AUTHORITY, WHICH IS NOT THE CASE U/S.35[1][IV] AND THAT THE AO HAS NOT DISPUTED THE FACT THAT THE BUILDING IS USED FOR RES EARCH AND DEVELOPMENT PURPOSE. HE, THEREFORE, ALLOWED THE ASS ESSEES APPEAL. AGAINST THE RELIEF GIVEN BY THE CIT[A] , THE REVENU E IS IN APPEAL BEFORE US. 17. THE LD. DR SUPPORTED THE ORDER OF THE AO AND DR EW OUR PARTICULAR ATTENTION TO THE PROVISIONS OF SEC.35[2A B] WHEREIN DEDUCTION IS NOT ALLOWABLE ON THE EXPENDITURE INCURRED ON LAN D AND BUILDING. THUS ACCORDING TO HIM, THE ASSESSEE IS NOT ENTITLED TO D EDUCTION U/S.35 OF THE ACT. 18. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT[A] AND SUBMITTED THAT THE ASS ESSEE HAS CLAIMED DEDUCTION U/S.35[1][IV] WHERE THERE IS NO EXCEPTION TO THE CAPITAL EXPENDITURE AND THERE IS NO RESTRICTION ON THE EXPE NDITURE INCURRED ON 9 BUILDING. HE SUBMITTED THAT THE CLAIM U/S.35[2AB] A LLOWS DEDUCTION @ OF 1 TIMES OF EXPENDITURE INCURRED BY THE ASSESSEE AND AS THE ASSESSEES CLAIM IS NOT U/S.35[2AB], THE SAME CANNO T BE CONSIDERED UNDER THE PROVISIONS OF LAW AND THE CIT[A] HAS RIG HTLY DISTINGUISHED THE REQUIREMENT UNDER BOTH THE PROVISIONS OF LAW AN D HAS ACCORDINGLY ALLOWED ASSESSEES CLAIM OF DEDUCTION. 19. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THEIR RIVAL CONTENTIONS, WE FIND THAT SEC.35 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION OF EXPENDITURE INCURRED ON SCIENTIFIC RES EARCH. CL.[IV] OF SUB- SEC.[1] OF SEC.35 RELATES TO DEDUCTION OF ANY EXPEN DITURE OF CAPITAL NATURE ON SCIENTIFIC RESEARCH RELATED TO THE BUSINE SS CARRIED ON BY THE ASSESSEE, AND SUCH DEDUCTION AS MAY BE ADMISSIBLE U NDER THE PROVISIONS OF SUB-SEC.[2]. SUB-SEC[2AB] OF SEC.35 PR OVIDES THAT WHERE A COMPANY ENGAGED IN THE BUSINESS OF PHARMACEUTICAL S ETC. INCURS ANY EXPENDITURE ON SCIENTIFIC RESEARCH [NOT BEING EXPEN DITURE IN THE NATURE OF COST OF ANY LAND OR BUILDING] ON IN-HOUSE RESEAR CH AND DEVELOPMENT FACILITY AS APPROVED BY THE PRESCRIBED AUTHORITY, T HEN DEDUCTION OF A SUM EQUAL TO 1 TIME OF THE EXPENDITURE SO INCURRE D SHALL BE ALLOWED. THUS, IT CAN BE SEEN THAT THE EXCEPTION TO THE CLAI M OF DEDUCTION OF THE EXPENDITURE INCURRED ON COST OF ANY LAND OR BUILDIN G IS PROVIDED FOR ONLY UNDER SUB-SEC.[2AB] OF SEC.35 AND NOT UNDER CL AUSE [IV] OF SUB- SEC.[1] OF SEC.35 OF THE ACT. THE ASSESSEES CLAIM IS UNDISPUTEDLY U/S.35[1][IV] OF THE ACT AND AS RIGHTLY HELD BY THE LD. CIT[A] 100% OF THE CAPITAL EXPENDITURE ON SCIENTIFIC RESEARCH RELA TING TO THE BUSINESS CARRIED ON BY THE ASSESSEE IS ADMISSIBLE AS PROVIDE D UNDER SUB-SEC[2] 10 THEREOF. IN VIEW OF THE SAME, WE DO NOT SEE ANY REA SON TO INTERFERE WITH THE ORDER OF THE CIT[A] AND THE REVENUES APP EAL IS DISMISSED. 20. IN THE RESULT, REVENUES APPEAL IN I.T.A.NO.478 2/M/07 IS DISMISSED. ORDER PRONOUNCED ON THIS 7TH DAY OF DECEMBER, 2009 . SD/- SD/- (P.M.JAGTAP) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI:7 TH DECEMBER, 2009. P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI. 11 SR.NO. PARTICULARS DATE INITIALS 1 DRAFT DICTATED ON 27-11-09 P 2 DRAFT PLACED BEFORE AUTHOR 2-12-09 P 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO SR.PS/PS 6 ORDER KEPT FOR PRONOUNCEMENT 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER