Serum Institute Of India Ltd. vs Deputy Commissioner Of Income-Tax

Headnote AI-drafted · Editorially reviewed

These were cross appeals filed by the assessee and the Revenue before the Income Tax Appellate Tribunal, Pune Bench, against the orders of CIT (Appeals)-11, Pune, for Assessment Years 2011-12 and 2012-13. The assessee, engaged in the manufacture and sale of life saving drugs and vaccines, was subjected to search and seizure action under Section 132 of the Income Tax Act on 21-06-2011, following which various disallowances were made by the Assessing Officer under multiple provisions including Section 14A, Section 35(2AB), and Section 32(1)(iia), among others, resulting in assessment of income at Rs.109,08,84,068/-.

The CIT(A) had partly allowed the assessee's appeal, following which both the assessee and the Revenue filed cross appeals before the Tribunal. The assessee challenged, inter alia, disallowances under Section 14A read with Rule 8D, foreign travel expenses, depreciation classification of assets, provision for leave encashment, product development expenses, demat charges, bogus purchases, rent paid for bungalow, depreciation on windmills, and selling and distribution expenses. The Revenue challenged the reliefs granted by the CIT(A).

The Tribunal adjudicated the issues on a ground-by-ground basis, noting that most grounds were covered by earlier decisions of the Tribunal in the assessee's own case or by binding precedents, and disposed of the appeals accordingly with directions to the Assessing Officer to follow the earlier Tribunal orders and applicable judicial precedents.

Catchwords: Income Tax Search and Seizure Section 132 Section 153A Disallowance under Section 14A Rule 8D Satisfaction of Assessing Officer Foreign Travel Expenses Depreciation Plant and Machinery Furniture and Fixtures Windmill Additional Depreciation Section 32(1)(iia) Provision for Leave Encashment Weighted Deduction Section 35(2AB) Product Development Expenses Clinical Trials Demat Charges Bogus Purchases Rent Disallowance Selling and Distribution Expenses Book Profit Section 115