DCIT 7(3), MUMBAI V. ZANDU PHARMACEUTICAL WORKS LTD, MUMBAI

ITA 7173/MUM/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6237 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 06-10-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 19-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Revised return; Capital expenditure
• Section: 80HHC; 14A

Judgement Text

1 ZANDU PHARMACEUTICAL WORKS LTD I II IN THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH E EE E MUMBAI MUMBAI MUMBAI MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI R R R R K PANDA, AM K PANDA, AM K PANDA, AM K PANDA, AM & SHRI VIJAY PAL RAO, JM & SHRI VIJAY PAL RAO, JM & SHRI VIJAY PAL RAO, JM & SHRI VIJAY PAL RAO, JM IT ITIT ITA NO A NO A NO A NO. . . . 394/MUM/2007 (ASSESSMENT YEAR 2004 394/MUM/2007 (ASSESSMENT YEAR 2004 394/MUM/2007 (ASSESSMENT YEAR 2004 394/MUM/2007 (ASSESSMENT YEAR 2004- -- -05) 05) 05) 05) ITA NO. ITA NO. ITA NO. ITA NO. 7173/MUM/200 7173/MUM/200 7173/MUM/200 7173/MUM/2008 88 8 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005- -- -06) 06) 06) 06) THE DY COMMR OF INCOME TAX 7(3), MUMBAI VS ZANDU PHARMACEUTICAL WORKS LTD 70 GOKHALE ROAD(SOUTH) DADAR (W), MUMBAI 25 (APPELLANT) (RESPONDENT) ITA NO. ITA NO. ITA NO. ITA NO. 6939/MUM/200 6939/MUM/200 6939/MUM/200 6939/MUM/2006 66 6 (ASSESSMENT YEAR 2004 (ASSESSMENT YEAR 2004 (ASSESSMENT YEAR 2004 (ASSESSMENT YEAR 2004- -- -05) 05) 05) 05) ITA NO. ITA NO. ITA NO. ITA NO. 7304/MUM/200 7304/MUM/200 7304/MUM/200 7304/MUM/2008 88 8 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005 (ASSESSMENT YEAR 2005- -- -06) 06) 06) 06) ZANDU PHARMACEUTICAL WORKS LTD 70 GOKHALE ROAD(SOUTH) DADAR (W), MUMBAI 25 VS THE DY COMMR OF INCOME TAX 7(3), MUMBAI (APPELLANT) (RESPONDENT) PAN PAN PAN PAN AAACZ0210G AAACZ0210G AAACZ0210G AAACZ0210G ASSESSEE BY: SHRI RAJESH PAREKH REVENUE BY: SHRI S K PAHWA O OO O R RR R D DD D E EE E R RR R PER PER PER PER BENCH BENCH BENCH BENCH: :: : ITA NO.6939/M/2007 AND ITA NO.394/MUM/2007 ARE CRO SS APPEALS THE FIRST ONE FILED BY THE REVENUE AND THE SECOND ONE F ILED BY THE ASSESSEE AND ARE DIRECTED AGAINST THE ORDER DATED 31.10.2006 OF THE CIT(A) XXX MUMBAI RELATING TO AY 2004-05. ITA NO7304/MUM/2008 AND ITA NO.717 3/MUM/2008 ARE ALSO CROSS APPEALS AND ARE DIRECTED AGAINST THE ORDER DA TED 17.10.2010 OF THE CIT(A)- VII MUMBAI RELATING TO AY 2005-06. FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2 ZANDU PHARMACEUTICAL WORKS LTD ITA NO. ITA NO. ITA NO. ITA NO. 6939 6939 6939 6939/MUM/200 /MUM/200 /MUM/200 /MUM/2006 66 6(BY (BY (BY (BY THE ASSESSEE AY 2004 THE ASSESSEE AY 2004 THE ASSESSEE AY 2004 THE ASSESSEE AY 2004- -- -05 0505 05 ) ) ) ) 2 GROUNDS OF APPEAL NO.1 BY THE ASSESSEE READS AS U NDER: THE LD CIT(A) ERRED IN REJECTING APPELLANTS CLAIM FOR NON ALLOCATION OF R&D EXPENSES TO NEW INDUSTRIAL UNDERTAKING FOR COMPUTIN G ELIGIBLE PROFIT U/S 80IA. 3 AFTER HEARING BOTH THE PARTIES, WE FIND THE ASSES SING OFFICER IN THE ASSESSMENT ORDER ALLOCATED R&D EXPENSES TO NEW INDU STRIAL UNITS ON TURNOVER BASIS ON THE BASIS OF THE ORDER OF THE EARLIER YEAR S. IN APPEAL, THE CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES O WN CASE FOR AYS 1993-94 TO 1999-00 DIRECTED THAT THE R&D EXPENSES BE ALLOCATE D ON INCREMENTAL PRINCIPLE BASIS AND NOT ON TURNOVER BASIS. THE LD COUNSEL FOR THE ASSESSEE, REFERRING TO THE ORDER FOR ASSESSMENT YEAR 1993-94 IN ASSESSEES OWN CASE DREW THE ATTENTION OF THE BENCH TO PARA 4 AT PAGES 6 & 7 OF THE ORDER AND SUBMITTED THAT THE TRIBUNAL FOLLOWING THE DECISIONS OF THE TRIBUNAL IN THE CASE OF FOOD SPECIALITIES LTD VS ACIT REPORTED IN 54 ITD 352 (MUM HAS DECIDED THE ISSUE A GAINST THE ASSESSEE. THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL, WHICH IS STILL PENDING. AS SUCH, THE MATTER AS OF NOW HAS BEEN DECIDED AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE BY THE LD D R, THIS GROUND BY THE ASSESSEE IS DISMISSED. 6 GROUNDS OF APPEAL NO.2 BY THE ASSESSEE READS AS U NDER: THE LD CIT(A) ERRED IN UPHOLDING THE DECISION OF A SSESSING OFFICER DISALLOWING PRORATE INTEREST PAID WITHOUT CONSIDERI NG INTEREST INCOME AND NOT FOLLOWING THE DECISION OF HIS PREDECESSOR WHEN DEPARTMENT HAS ACCEPTED THE DECISION OF THE LD CIT(A) FOR THE ASSE SSMENT YEAR 2002-03 AND NOT PREFERRED FURTHER APPEAL BEFORE ITAT. 3 ZANDU PHARMACEUTICAL WORKS LTD 6.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IN THE RETURN OF INCOME DECLARED DIVIDEND INCOME OF ` . 2,72,698/- AND CLAIMED THE SAME AS EXEMPT U/S 10(33) OF THE I T ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED INTEREST OF RS. 72.02 LACS IN THE P&L ACCOUNT. HE N OTED FROM THE BALANCE SHEETS OF THE ASSESSEE COMPANY THAT THE ASSESSEE COMPANY H AS MADE INVESTMENTS IN THE EQUITY SHARES OF SUBSIDIARY COMPANIES, UNIT TR UST OF INDIA AND EQUITY SHARES OF A NUMBER OF QUOTED AND UNQUOTED COMPANIES. FROM THE VARIOUS DETAILS AVAILABLE, HE NOTED THAT THE BIFURCATION OF QUOTED INVESTMENT AND UNQUOTED INVESTMENT IS RS. 67.95 LACS AND RS. 245.10 LACS AF TER MAKING PROVISIONS OF RS. 44.55 LACS FOR DIMINISHING IN VALUE OF INVESTMENTS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF EXPENSES INCU RRED ON EARNING OF DIVIDEND AND THE INVESTMENT RESULTING IN DIVIDEND AND EXPLAI N AS TO WHY THE EXPENDITURE HAS NOT DEDUCTED FOR WORKING OUT THE EXEMPT INCOME U/S 10(33). REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE AND RELYING ON A FEW DECISIONS, THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS. 4,44,257/- BEI NG INTEREST ATTRIBUTABLE TO INVESTMENTS IN SHARE BY ADOPTED THE FOLLOWING FORMU LA: INVESTMENT IN SHARES X INTEREST PAID INVESTMENT IN SHARES X INTEREST PAID INVESTMENT IN SHARES X INTEREST PAID INVESTMENT IN SHARES X INTEREST PAID 313.05 X 72. 313.05 X 72. 313.05 X 72. 313.05 X 72. 02 = 4 02 = 4 02 = 4 02 = 4,42,257 ,42,257 ,42,257 ,42,257 CAPITAL EMPLO CAPITAL EMPLO CAPITAL EMPLO CAPITAL EMPLOYED (INCLUSIVE OF BORROWED FUNDS 5074.96 YED (INCLUSIVE OF BORROWED FUNDS 5074.96 YED (INCLUSIVE OF BORROWED FUNDS 5074.96 YED (INCLUSIVE OF BORROWED FUNDS 5074.96 6.2 BEFORE THE CIT(A), IT WAS SUBMITTED THAT NO INT EREST CAN BE ATTRIBUTABLE TO UNDER SEC 14A SINCE THE INVESTMENT MADE BY THE ASSE SSEE COMPANY WAS FROM OWN FUNDS AND NOT FROM BORROWED FUNDS. IT WAS FURTH ER SUBMITTED THAT AS PER CIT(A)S DIRECTIONS FOR AY 2002-03 ONLY NET INTERES T SHOULD BE ALLOCATED . IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS ALLOCATED THE INTEREST ON GROSS BASIS AND NOT ON NET BASIS EVEN AFTER DIRECTIONS GIVEN BY THE CIT(A) IN AY 2002-03. THE CIT(A) IN THE SAID ORDER HAD DIRECTED THE ASSESSING OFFICER TO REDUCE INTEREST INCOME AND INTEREST PAYABLE AND RECALCULATE U/S 14A . SINCE THE ISSUE IS IDENTICAL, 4 ZANDU PHARMACEUTICAL WORKS LTD IT WAS SUBMITTED THAT FOR THIS YEAR ALSO THE ASSESS ING OFFICER MAY BE DIRECTED ACCORDINGLY. 6.3 HOWEVER, THE CIT(A) WAS NOT CONVINCED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. HE OBSERVED THAT IT IS SETTLED LAW TH AT CONDITIONS FOR DISALLOWANCE OF INTEREST U/S 36(1)(III) OR U/S 57(3) SHALL NOT A PPLY WHILE ESTIMATING INTEREST LIABILITY ON BORROWINGS ATTRIBUTABLE TO OR IN R ESPECT OF EXPENDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF TOTA L INCOME UNDER THE ACT. ACCORDING TO HIM, IT IS TO BE EXAMINED AS TO WHETHE R THERE WAS ANY DIRECT NEXUS BETWEEN BORROWED FUND AND THE INVESTMENTS FROM WHIC H INCOME NOT CHARGEABLE TO TAX IS EARNED. HE OBSERVED THAT THE DIRECTIONS BY HIS PREDECESSOR IS FOR THAT YEAR ONLY AND NOT FOR SUBSEQUENT YEARS. THEREFORE, THE SAME HAS TO BE CALCULATED ON THE BASIS OF MATERIAL FACTS BROUGHT ON RECORD BY THE ASSESSEE. HE ACCORDINGLY UPHELD THE ACTION OF THE AO IN DISALLOWING THE INTE REST BY APPLYING PROVISIONS OF SEC. 14A. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE US. 7 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E DECISION OF THE SPECIAL BENCH IN THE CASE OF DAGA CAPITALS MANAGEMENT HAS B EEN FOLLOWED BY THE CIT(A). HOWEVER, SINCE THE CIT(A) HAD GIVEN A FINDI NG IN AY 2002-03 THAT ONLY THE NET INTEREST BE ALLOCATED AND THE REVENUE HAS NOT P REFERRED ANY APPEAL BEFORE THE TRIBUNAL; THEREFORE, THE ORDER OF THE CIT(A) IS BINDING ON THE REVENUE AUTHORITIES. ON THE OTHER HAND, THE LD DR SUPPORTED THE ORDER OF THE CIT(A). 5 ZANDU PHARMACEUTICAL WORKS LTD 8 AFTER HEARING BOTH THE SIDES, WE ARE OF THE CONSI DERED OPINION THAT THE MATTER REQUIRES FRESH ADJUDICATION AT THE LEVAL OF THE ASSESSING OFFICER IN THE LIGHT OF THE LATEST DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG P LTD VS ACIT REPORTED IN 328 ITR 81. WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LD COUNSEL FOR THE ASSESSEE THAT SINCE THE CIT(A) HAD GIVEN RELIEF IN ASSESSMENT YEAR 2002-03 AND TH E REVENUE HAS NOT PREFERRED ANY FURTHER APPEAL BEFORE THE TRIBUNAL; THEREFOR E, THE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 2002-03 SHOULD BE BINDING ON THE RE VENUE. IT IS THE SETTLED PROPOSITION OF LAW THAT PRINCIPLES OF RES-JUDICATE DO NOT APPLY TO THE INCOME TAX PROCEEDINGS. THEREFORE, MERELY BECAUSE THE RE VENUE HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF THE CIT(A) IN THE PRECE DING YEAR CANNOT BE BINDING ON THE REVENUE TO FOLLOW THE SAME IN THE SUBSEQUENT AS SESSMENT YEARS. IN THIS VIEW OF THE MATTER, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. ITA NO. ITA NO. ITA NO. 394 394 394 394/MUM/2007 /MUM/2007 /MUM/2007 /MUM/2007(BY THE REVENUE AY 2004 (BY THE REVENUE AY 2004 (BY THE REVENUE AY 2004 (BY THE REVENUE AY 2004- -- -05 0505 05 ) 9 GROUNDS OF APPEAL NO.1 BY THE REVENUE READS AS UN DER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOCATE RESEARCH AND DEVELOPMENT EXPENSES ON INCREMENTAL PRINCIPAL BASIS AND NOT ON TURNOVER BASIS. 10 AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESS ING OFFICER IN HIS ORDER ALLOCATED R&D EXPENSES ON THE NEW INDUSTRIAL UNIT O N TURNOVER BASIS ON THE BASIS OF HIS ORDER FOR EARLIER ORDER. IN APPEAL, THE CIT (A) FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1993-94 TO ASSESSMENT 6 ZANDU PHARMACEUTICAL WORKS LTD YEAR 1999-00 DIRECTED THE ASSESSING OFFICER TO AL LOCATE RESEARCH AND DEVELOPMENT EXPENSES ON INCREMENTAL PRINCIPAL BASIS AND NOT ON TURNOVER BASIS BY HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND GONE THROUGH THE ORDER OF THE HONBLE ITAT AND PERUSED T HE ORDER OF THE ASSESSING OFFICER. THERE IS NO DISPUTE REGARDING TH E ALLOCABILITY AND APPORTIONING THE EXPENSES ON RESEARCH AND DEVELOPME NT AMONGST THE VARIOUS UNITS OF THE APPELLANT COMPANY AND THIS HAS BEEN UPHELD BY THE HONBLE ITAT IN THE CASE OF THE APPELLANT ITSELF. B UT THE APPORTIONMENT HAS BEEN DIRECTED TO BE MADE IN ACCORDANCE WITH THE RAT IO OF THE DECISION OF THE HONBLE TRIBUNAL IN THE CASE OF FOODS SPECIALIT IES LTD VS ACIT. SINCE THE HONBLE JURISDICTIONAL ITAT IN THE CASE OF APPE LLANT ITSELF, ON THIS IDENTICAL ISSUE, FOR THE ASSESSMENT YEAR 1993-94 TO 1999-00 HAS DIRECTED TO ASSESSING OFFICER TO WORK OUT THE ALLOCATION OF EXPENSES AMONGST VARIOUS UNITS AND RE-COMPUTE THE DEDUCTION IN THE V ARIOUS SECTIONS IN ACCORDANCE TI THE RATIO OF DECISION IN THE CASE OF FOOD SPECIALITIES LTD VS ACIT (54 ITD 352), RESPECTFULLY FOLLOWING THIS DECI SION, FOR THE YEAR UNDER CONSIDERATION ALSO, THE ASSESSING OFFICER IS DIREC TED ACCORDINGLY. THIS GROUND IS THEREFORE ALLOWED IN FAVOUR THE APPELLANT . 11 AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE US. 12 AFTER HEARING BOTH THE SIDES, WE DONT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND THE TRIBUNAL IN ASSESSEES O WN CASE FOR THE ASSESSMENT YEARS 1993-94 TO 1999-2000 HAS RESORTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE IN THE LIGHT OF THE DE CISION OF THE TRIBUNAL IN THE CASE OF FOOD SPECIALITIES LTD (SUPRA). WE FIND FOLLOWING THIS ORDER OF THE TRIBUNAL, THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2003-04 HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO WORK OUT THE ALLOCATION OF EXPENSES AM ONGST VARIOUS UNITS OF THE ASSESSEE IN THE LIGHT OF THE DECISION OF THE TRIBUN AL IN THE CASE OF FOOD 7 ZANDU PHARMACEUTICAL WORKS LTD SPECIALITIES LTD. SINCE THE CIT(A)S ORDER IS IN CO NSONANCE WITH THE DIRECTION OF THE TRIBUNAL IN EARLIER YEARS, THEREFORE, WE FIND N O INFIRMITY IN THE SAME. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISS ED. 13 GROUNDS OF APPEAL NO.2 BY THE REVENUE READS AS U NDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN DIRECTING THE ASSESSING OFFICER TO ALLOCATE ADVERTISEMENT AND HEA D OFFICE EXPENSES ON INCREMENTAL TURNOVER BASIS AND NOT ON PRODUCT BASIS . 13.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE THAT THE EXPENSES ON ADV ERTISEMENT AND HEAD OFFICE EXPENSES (INCLUDING DEPOT EXPENSES) SHOULD BE ALLOC ATED ON INCREMENTAL TURNOVER BASIS ON THE GROUND THAT THESE EXPENSES AR E TO BE ALLOCATED ON PRODUCT BASIS AND TURNOVER BASIS AS PER CIT(A)S DIRECTIONS IN ASSESSMENT YEAR 1993-94. 13.2 BEFORE THE CIT(A), IT WAS SUBMITTED THE ITAT IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1993-94 TO 1999-00 HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ALLOCATE THES E EXPENSES ON INCREMENTAL TURNOVER BASIS IN THE LIGHT OF THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF FOOD SPECIALITIES LTD (SUPRA). 13.3 THE CIT(A), FOLLOWING THE DECISION OF THE TRIB UNAL IN ASSESSEES OWN CASE, DIRECTED THE ASSESSING OFFICER TO WORK OUT THE ALLO CATION OF THE AFORESAID EXPENSES AMONG VARIOUS UNITS IN ACCORDANCE WITH THE RATIO OF THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE. AGGRIEVED WITH SU CH ORDER OF THE CIT(A), THE REVENUE IS IN APPAL HERE BEFORE US. 8 ZANDU PHARMACEUTICAL WORKS LTD 14 AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND IDENTICAL ISSUE HAD COME UP B EFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1995-96 VID E ITA NO.5428/MUM/98. WE FIND THE TRIBUNAL HAS DECIDED THIS ISSUE AND RES TORED THE SAME T THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO FOLLOW THE DECISION OF THE TRIBUNAL IN THE CASE OF FOOD SPECIALITIES LTD (SUPRA). SINCE I N THE INSTANT CASE, THE CIT(A) HAS ALSO DIRECTED THE ASSESSING OFFICER TO ALLOCAT E THE EXPENSES AMONG VARIOUS UNITS AND RECOMPUTE THE DEDUCTION IN ACCORDANCE WIT H RATIO OF THE DECISION OF THE TRIBUNAL IN THE CASE OF FOOD SPECIALITIES LTD ( SUPRA), WE DO NOT FIND ANY INFIRMITY IN HIS ORDER AND ACCORDINGLY UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 15 GROUNDS OF APPEAL NO.3 BY THE REVENUE READS AS U NDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW 1/5 TH OF EXPENSES OF ` 1 LAC BEING STAMP DUTY PAID IN ISSUE OF SHARES 15.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSING OFFICER DISALLOWED AN AMOUNT OF ` 20,000/- BEING 1/5 TH OF THE EXPENSES OF ` 1 LAC INCURRED BY THE ASSESSEE AS STAMP DUTY ON ISSUE OF SHARES. WHILE DO ING SO, HE RELIED ON HIS ORDER FOR ASSESSMENT YEAR 2001-02. HE ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE CIT(A) HAS GIVEN RELIEF ON THIS ISSUE ON T HE GROUND THAT THE DEPARTMENT HAS PREFERRED APPEAL AGAINST THE ORDER OF THE CIT(A ). 15.2 THE CIT(A) ACCEPTED THE ALTERNATE GROUND RAISE D BY THE ASSESSEE AND DELETED THE ADDITION BY HOLDING AS UNDER: 9 ZANDU PHARMACEUTICAL WORKS LTD ON CONSIDERING THE SUBMISSION OF APPELLANT AND PER USING THE ORDER OF MY LD PREDECESSOR, FOR THE ASSESSMENT YEAR 2001-02, I FIND THAT THIS ISSUE AROSE IN THE ASSESSMENT YEAR 1998-99 AND 1999-2000. THE CIT(A) VIDE HIS COMMON ORDER DATED 30.3.2004 FOR BOTH THE YEARS HAS DECIDED THIS ISSUE AND RECORDED HIS FINDING IN PARA 6 OF THE SAID ORDE R. RELYING ON THE SUPREME COURT JUDGMENT IN THE CASE OF PUBJAB STATE INDUSTRIAL DEVELOPMENT LTD (225 ITR792) AND IN THE CASE OF BRO OKE BOND (INDIA) LTD 225 ITR 798, IT WAS HELD THAT STAMP DUTY PAYMENT FO R ISSUE OF PREFERENTIAL SHARES WAS CAPITAL EXPENDITURE. HOWEVER, THE CIT(A) DIRECTED TO ALLOW DEDUCTION U/S 35D AS PER LAW. FOLLOWING THIS DECISI ON, MY LD PREDECESSOR ALSO HELD THAT EXPENDITURE ON STAMP DUTY IS CAPITAL EXPENDITURE AND DIRECTED THE ASSESSING OFFICER TO ALLOW APPROPRIA TE DEDUCTION PROVIDED U/S 35D. AS THE ASSESSING OFFICER WHILE DISALLOWIN G THE CLAIM OF THE APPELLANT HAS NOT BROUGHT ON RECORD ANY CONTRARY DE CISION TO THE FINDINGS OF THE THEN CIT(A) AND MADE THE DISALLOWANCE MERELY ON THE GROUND THAT A SECOND APPEAL IS PREFERRED ON THIS ISSUE, IN MY OPI NION, IT IS NOT SUFFICIENT REASON FOR MAKING THE DISALLOWANCE. ACCORDINGLY, TH E ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION U/S 35DA AS PER LAW. TH IS GROUND OF APPEAL IS ALSO ALLOWED IN FAVOUR OF THE APPELLANT. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL HERE BEFORE US. 16 AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE FIND THE CIT(A) WHILE DECIDING THE ISSUE HAD FOLLOWED THE ORDERS OF HIS PREDECESSOR. NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE AGAINST THE PREVIOUS ORDERS OF THE CIT(A) BY THE LD DR. SINCE THE ASSESSING OFFICER HAS FOLLOWED THE EARLIER ORDERS OF HIS PREDECESSOR AND SINCE THE CIT(A) FOLLOWING THE ORDERS OF HIS PREDECESSORS HAS GIVEN RELIEF AND S INCE NO CONTRARY MATERIAL WAS BROUGHT TO OUR NOTICE; THEREFORE, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE CIT(A). WE FURTHER FIND FROM THE ORDER OF THE AD DL COMMISSIONER OF INCOME TAX FOR ASSESSMENT YEAR 2006-07 THAT HE HIMSELF HAS AL LOWED SUCH CLAIM OF THE ASSESSEE IN PARA 6( C) (PAGE 8) OF HIS ORDER. THER EFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE GROUND RA ISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 17 GROUNDS OF APPEAL NO.4 BY THE REVENUE READS AS U NDER: 10 ZANDU PHARMACEUTICAL WORKS LTD ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW 1/10 TH OF EXPENSES OF `. 5,56,720/- I.E. ` 55,672/-BEING AN ADDITION AL DEDUCTION U/S 35D ON ACCOUNT OF STAMP DUTY, ROC FEES ETC. 17.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ASSE SSING OFFICER DISALLOWED THE CLAIM OF ` 55,756/- BEING 1/10 TH OF THE EXPENSES OF ` 5,57,560/- INCURRED BY THE ASSESSEE ON ACCOUNT OF STAMP DUTY, ROC FEES AND OTH ER RELATED EXPENSES FOR INCREASE OF THE SHARE CAPITAL ON THE GROUND THAT T HE SAME ARE DISALLOWED IN THE ASSESSMENT YEAR 1998-99. THE CONTENTION OF THE AS SESSEE THAT THE CIT(A) HAS GIVEN A DIRECTION TO ALLOW THE DEDUCTION U/S 35D WA S ALSO REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE DEPARTMENT HAS NOT ACCEPTED THE ORDER OF THE CIT(A) AND HAS PREFERRED APPEAL BEFORE THE T RIBUNAL. 17.2 IN APPEAL, THE CIT(A) FOLLOWING THE ORDERS OF HIS PREDECESSOR ALLOWED THE DEDUCTION IN FAVOUR OF THE ASSESSEE BY HOLDING AS U NDER: AS IN THE CASE OF GROUND NO.5, THIS ISSUE HAS ALSO BEEN DECIDED BY THE THEN CIT(A) FOR THE ASSESSMENT YEAR 1998-99 AND 199 9-2000, WHEREIN AFTER CONSIDERING THE APPELLANTS SUBMISSIONS AND G OING THROUGH SECTIONS 35D(2), IT HAS BEEN HELD THAT EXPENDITURE OF PAYMEN T TO REGISTER OF COMPANIES AND STAMP DUTY FALLS U/S 35D(2)(III). HE ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO ALLOW THE APPROPRIATE DEDU CTION OVER THE YEARS INCLUDING THE ASSESSMENT YEAR UNDER APPEAL AS PROVI DED U/S 35D AND ALLOWED THE ALTERNATIVE GROUND OF APPEAL OF THE APP ELLANT. THE ASSESSING OFFICER WHILE DISALLOWING THE CLAIM OF DEDUCTION OF THE APPELLANT HAS NOT BROUGHT ON RECORD ANY MATERIAL CONTRARY TO THE FIND ING OF THE THEN CIT(A) AND DISALLOWED THE CLAIM MERELY ON THE GROUND THAT DEPARTMENT HAS PREFERRED A SECOND APPEAL. AS THE THEN CIT(A) HAS G IVEN A CATEGORICAL FINDING AND DIRECTION TO ALLOW THE DEDUCTION NOT ON LY FOR THE AYS 1998-99 AND 1999-2000 BUT ALSO THE YEARS TO COME, TILL THE CAPITAL EXPENDITURE GETS REDUCED TO NIL, AND UP TILL ASSESSMENT YEAR 2007-08 , THE ACTION OF THE ASSESSING OFFICER IN NOT FOLLOWING THE DIRECTION OF THE CIT(A) IS NOT APPROPRIATE AND JUSTIFIED. ACCORDINGLY, THE ASSESSI NG OFFICER IS DIRECTED TO ALLOW 1/10 TH OF EXPENSES CLAIMED BY THE APPELLANT. THIS GROUND IS ALSO ALLOWED IN FAVOUR OF THE APPELLANT. 11 ZANDU PHARMACEUTICAL WORKS LTD 18 AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). ADMITTEDLY, THE CIT(A) FOLLOWING HIS O RDERS FOR ASSESSMENT YEAR 1998- 99 AND 1999-00 HAS ALLOWED THE CLAIM OF THE ASSESSE E. NOTHING CONTRARY MATERIAL WAS BROUGHT TO OUR NOTICE AGAINST THE ORDE R OF THE CIT(A). WE FURTHER FIND FROM THE ORDER OF THE ADDL. COMMISSIONER OF I NCOME TAX FOR ASSESSMENT YEAR 2006-07 THAT HE HIMSELF HAS ALLOWED THE CLAIM OF THE ASSESSEE AT PARE 6 (C)(PAGE 8) OF HIS ORDER.. WE, THEREFORE, DO NOT F IND ANY INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 19 GROUNDS OF APPEAL NO.5 BY THE REVENUE READS AS U NDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE SALES TAX FROM THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTAT ION OF DEDUCTION U/S 80HHC RELYING ON THE DECISION OF SUDARSHAN CHEM ICALS LTD. 20 AFTER HEARING BOTH THE SIDES, WE FIND THIS GROUN D HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF LAXMI MACHINE WORKS RE PORTED IN 290 ITR 667. ACCORDINGLY, THIS GROUND BY THE REVENUE IS DISMISSE D. 21 GROUNDS OF APPEAL NO.6 BEING GENERAL IN NATURE, IS DISMISSED. ITA NO. ITA NO. ITA NO. ITA NO. 7304 7304 7304 7304/MUM/200 /MUM/200 /MUM/200 /MUM/2008(BY THE ASSESSEE AY 2005 8(BY THE ASSESSEE AY 2005 8(BY THE ASSESSEE AY 2005 8(BY THE ASSESSEE AY 2005- -- -06 0606 06 ) 22 GROUNDS OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER: THE LD CIT(A) ERRED IN REJECTING APPELLANTS CLAIM FOR NON-ALLOCATION OF R&D EXPENSES TO NEW INDUSTRIAL UNDERTAKING FOR COMP UTING ELIGIBLE PROFIT U/S 80IA BASED ON THE ORDER OF THE ITAT FOR ASSESSM ENT YEAR 1993-94 TO 12 ZANDU PHARMACEUTICAL WORKS LTD 1999-2000, IN SPITE OF KNOWING THE FACT THE APPELLA NT HAS FILED AN APPEAL AGAINST THE SAID ORDER IN BOMBAY HIGH COURT AND THE SAME HAS BEEN ADMITTED FOR LEGAL REVIEW AND ACCEPTED ALLOCATION O F R&D EXPENSE AS PER ITAT. 23 AFTER HEARING BOTH THE SIDES, WE FIND THIS GROUN D IS IDENTICAL TO GROUND OF APPEAL NO.1 IN ITA NO.6939/MUM/2006. WE HAVE ALREA DY DECIDED THE ISSUE AGAINST THE ASSESSEE AND THE GROUND RAISED BY THE A SSESSEE HAS BEEN DISMISSED. FOLLOWING THE SAME RATIO, THIS GROUND BY THE ASSESS EE IS ALSO DISMISSED. 24 GROUNDS OF APPEAL NO.2 BY THE ASSESSEE READS AS UNDER: THE LD CIT(A) ERRED IN ALLOWING CLAIM U/S 80IA OF ` 2,83,02,467/- INSTEAD OF CLAIM OF ` . 3,86,51,701/- DETERMINED BY ASSESSING OFFICER AS PER THE DIRECTION GIVEN BY THE ITAT. THE LD CIT(A) OUGHT TO HAVE ALLOWED CLAIM OF RS. 3,86,51,701/- INSTEAD OF CLAIM OF ` . 2,83,02,467/- WHEN THE ASSESSEE HAD RESERVED THEIR RIGHTS TO RE-COMPUTE THE CLAIM B ASED ON ORDER OF ITAT AND OUGHT NOT TO HAVE RESTRICTED DEDUCTION TO ` 2,83,02,467/- AND OUGHT TO HAVE GIVEN DIRECTION TO ALLOW ` 3,86,51,701/- BASED ON DIRECTION OF ITAT. 24.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSE SSEE HAD CLAIMED DEDUCTION OF ` . 2,28,95,230/- U/S 80IA IN RESPECT OF MASAT UNIT A ND DEDUCTION OF ` 54,07,112/- U/S 80IA IN RESPECT OF PIPARIA UNIT TOTALLING TO ` 2,83,02,467/-. THE COMPUTATION OF THE SAID AMOUNT OF DEDUCTION WAS BASED ON THE STAND OF THE REVENUE TAKEN IN RESPECT OF THE EARLIER YEARS I.E ASSESSMENT YEAR 19 93-94 IN THE MATTER OF ALLOCATION OF THE COMMON EXPENSES TO THE DIFFERENT UNITS, BASED ON THE RATIO OF UNIT-WISE TURNOVER TO TOTAL TURNOVER. THE ASSESSEE, WHILE FILING ITS RETURN OF INCOME HAD APPENDED A NOTE BY WHICH IT HAS RESERVED ITS RIGHT TO REVISE THE CLAIM U/S 80IA ON THE OUTCOME OF THE DECISION OF TH E ITAT IN ITS APPEALS. SUBSEQUENTLY, THE TRIBUNAL DISPOSED OF THE APPEAL F OR ASSESSMENT YEAR 1993-94 TO 1999-00 BY CONSIDERING THE ORDER DATED 1.8.2006 WHEREIN IDENTICAL ISSUES WERE INVOLVED. ACCORDINGLY, THE ASSESSEE COMPANY SUBMITTED ITS REVISED 13 ZANDU PHARMACEUTICAL WORKS LTD COMPUTATION OF INCOME U/S 80IA RE-WORKING THE DEDU CTION OF PIPARIA UNIT AT ` 53,79,987/- AND THAT OF MASAT UNIT AT ` 3,32,71,714/- TOTALLING TO ` 3,86,51,701/- AS AGAINST THE ORIGINAL CLAIM OF ` 2,83, 02,467/- . SINCE THE DEPARTMENT HAS NOT ACCEPTED THE ORDER OF THE TRIBUN AL AND HAS FILED APPEAL BEFORE THE HONLBLE BOMBAY HIGH COURT U/S 260A, THE ASSESSING OFFICER RESTRICTING THE ENHANCEMENT OF THE CLAIM MADE BY TH E ASSESSEE AND RESTRICTED SUCH DEDUCTION TO ` . 2,64,19,,669/-. 24.2 IN APPEAL, IT WAS SUBMITTED THAT THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IS BINDING ON THE ASSESSING OFFICER AND TH EREFORE, HE SHOULD HAVE FOLLOWED THE SAME. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S 80IA AT ` 2,83,02,467/- BY HOLDING AS UNDER: THE UNDERSIGNED HAS CAREFULLY PERUSED THROUGH THE RIVAL CONTENTIONS. IT IS NOTED THAT ONCE THE ITAT HAS TAKEN A DECISION ON TH E IDENTICAL ISSUE IN THE APPELLANTS OWN CASE IN THE AYS FROM 1993-94 TO 199 9-2000 VIDE ORDER DATED 1/8/2006 AND ACCEPTED THE PRINCIPLE OF INCREM ENTAL ALLOCATION OF VARIOUS EXPENSE, THE ASSESSING OFFICER SHOULD HAVE FOLLOWED THE TRIBUNALS DECISION DURING THE YEAR. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ALL OW O THE APPELLANT THE DEDUCTION U/S 80IA AT ` 2,83,02,467/- AND THEREFORE TO THIS EXTENT THE APPELLANT GETS THE RELIEF. 25 AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL HERE BEFORE US. 26 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAD FILED THE RETURN OF INCOME ON 31.10.2005 WHEREAS THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 1993-94 CAME ON 1.8.2006. HE SUBM ITTED THAT COMPUTATION OF 14 ZANDU PHARMACEUTICAL WORKS LTD INCOME DECLARED BY THE ASSESSEE SHOULD BE READ WITH THE NOTES ON ACCOUNTS ATTACHED. HE SUBMITTED THAT THE ASSESSING OFFICER HAS REPRODUCED THE NOTES GIVEN BY THE ASSESSEE WHILE COMPUTING THE CLAIM OF DEDUCTION U/S 80IA WHEREIN IT IS MENTIONED THAT ITS RETURN OF INCOME IS SUBJEC T TO THE OUTCOME OF THE ORDER OF THE ITAT. HE ACCORDINGLY SUBMITTED THAT THE DEDUCTI ON CLAIMED IN THE REVISED COMPUTATION SHOULD BE ALLOWED. 26.1 THE LD DR ON THE OTHER HAND STRONGLY OPPOSED T HE ARGUMENTS ADVANCED BY THE LD COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT ANY RETURN CANNOT BE SUBJECT TO ANY CONDITION. HE SUBMITTED THAT THE CIT(A) IS B OUND BY THE ORDER OF THE ITAT FOR THAT YEAR. THE REMEDY BEFORE THE ASSESSEE WAS U /S 264. THE ASSESSEE, IF SO ADVISED, SHOULD HAVE TAKEN A STAND AT THE TIME OF F ILING OF ITS RETURN. HE CANNOT MAKE CONDITIONAL CLAIM OR CONTINGENT CLAIM. SUCH T YPE OF CLAIMS SHOULD NOT BE ENTERTAINED OR ENCOURAGED. 27 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IN OUR CONSIDERED OPINION, THE ASSES SEE CANNOT BE GIVEN ANY LIBERTY TO MAKE CONDITIONAL CLAIMS. IT IS FOR THE A SSESSEE TO MAKE A CLAIM IN THE ORIGINAL OR REVISED RETURN AND IT IS FOR THE DEPART MENT TO EITHER ACCEPT OR REJECT SUCH TYPE OF CLAIM. THE ASSESSEE CANNOT MAKE A C ONDITIONAL CLAIM ON THE BASIS OF OUTCOME OF THE DECISION OF THE TRIBUNAL FOR PAST YEARS. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND A CCORDINGLY UPHOLD THE SAME. THIS GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY D ISMISSED. 28 GROUNDS OF APPEAL NO.3 BY THE ASSESSEE READS AS UNDER: 15 ZANDU PHARMACEUTICAL WORKS LTD THE LD CIT(A) ERRED IN MISINTERPRETING THE JUDGMEN T PRONOUNCED IN THE CASE OF WIMCO SEEDLINGS VS DCIT REPORTED IN 107 ITD 267 (DEL) AND WRONGLY APPLIED THE JUDGMENT OF THE ASSESSEE COMPAN Y WHEN THE FACTS ARE TOTALLY DIFFERENT. AS IN THE CASE OF THE ASSESS EE COMPANY THERE IS A NET INTEREST INCOME AND SO THERE IS NO ALLOCATION OF IN TEREST EXPENSE U/S 14A AND OUGHT TO HAVE FOLLOWED THE JUDGMENT OF CIT(A) F OR ASSESSMENT YEAR 2002-03. 28.1 AFTER HEARING BOTH THE SIDES, WE FIND THE ASSE SSEE HAS SHOWN DIVIDEND INCOME OF ` .16,68,000/- AND CLAIMED THE SAME AS EXEMPT U/S 10( 33) OF THE I T ACT. SINCE IT HAD CLAIMED INTEREST EXPENDITURE OF ` 52.68 LACS IN THE P&L ACCOUNT, THE ASSESSING OFFICER DISALLOWED ` 7,35,622/- U/S 14A OF THE I T ACT. 28.2 IN APPEAL, THE CIT(A) FOLLOWING THE DECISION O F THE THIRD MEMBER OF THE TRIBUNAL IN THE CASE OF WIMCO SEEDLINGS (SUPRA) UPHELD THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF TH E CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE US. 29 AFTER HEARING BOTH THE SIDES, WE FIND THIS GROUN D IS IDENTICAL TO THE GROUNDS OF APPEAL NO. 2 IN ITA NO.6939/MUM/06. WE HAVE ALRE ADY DECIDED THE ISSUE FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF GODREJ & BOYCE MFG P LTD (SUPRA) AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. FOLLOWING THE SAME RATIO, WE RESTORE THIS GROUND ALSO TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION IN THE LIGHT OF OUR DIRECTIONS THEREIN. THE GROUND RAISED BY THE ASSES SEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 16 ZANDU PHARMACEUTICAL WORKS LTD ITA NO. ITA NO. ITA NO. ITA NO. 7173 7173 7173 7173/MUM/200 /MUM/200 /MUM/200 /MUM/2008(BY THE REVENUE AY 2005 8(BY THE REVENUE AY 2005 8(BY THE REVENUE AY 2005 8(BY THE REVENUE AY 2005- -- -06 0606 06 ) 30 THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION/S 80IA OF ` 2,83,02,467/- FOLLOWING TRIBUNAL DECISION IN THE C ASE OF FOOD SPECIALITIES LTD (54 ITD 352) IGNORING THE FACT THAT ADOPTING TH IS FORMULA FOR ALL SITUATIONS WITHOUT APPLYING MIND TO INDIVIDUAL SITU ATION AMOUNTS TO FRAMING A NEW RULE FOR ALLOCATION OF OVERHEADS. 31 AFTER HEARING BOTH THE SIDES, WE FIND THIS GROUN D IS CO-RELATED TO THE GROUNDS OF APPEAL NO.2 RAISED BY THE ASSESSEE IN IT S APPEAL IN ITA NO.7304/MUM/2008. WE HAVE ALREADY DECIDED THIS GROU ND AND THE ORDER OF THE CIT(A) HAS ALREADY BEEN UPHELD. IN VIEW OF THE SAME , THIS GROUND BY THE REVENUE IS DISMISSED. ARE DISM 32 IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 30 TH DAY OF NOV 2010. SD/- SD/- ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 30 TH NOV 2010 RAJ* 17 ZANDU PHARMACEUTICAL WORKS LTD COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI