2015 (6) TMI 679 - HC - Income Tax

Appeal is admitted with regard to Question A and G . Whether the Tribunal was justified in holding head office expenditure over and above what had already been allocated by the appellant was required to be further allocated for the purposes of computing deduction under section 10A, 10B, 80IC and 80IB of the Income Tax Act, 1961? Whether on the facts and in the circumstances of the case the Tribunal ought to have held that no adjudication in terms of Section 145(2) of the Act can be made in respect of that part of the purchase price that represented the cenvat credit available on the goods purchased by the appellant as the same was not a duty that was paid or incurred by the appellant? (Reframed during the course of hearing.)

Summary

Issues involved:
- Challenge to the order of the Income Tax Appellate Tribunal related to Assessment Year 2006-07.
- Questions of law raised by the appellant regarding head office expenditure allocation, retirement pension provision, non-compete covenants, disallowance under Section 14A, and adjudication under Section 145(2) of the Income Tax Act, 1961.

Analysis:
1. The appellant challenged the Tribunal's order on various grounds. One of the issues raised was the allocation of head office expenditure for computing deductions under specific sections of the Income Tax Act. The Tribunal's decision on this matter was disputed by the appellant.

2. Another issue raised was the provision for retirement pension amounting to Rs. 81.56 crores. The appellant claimed this amount as a deduction, but the Tribunal's decision regarding this provision was questioned.

3. The appellant also contested the Tribunal's ruling on the payment of non-compete fees to Prime Healthcare Products and MUL Dentpro (P) Ltd. The Tribunal remanded this issue to the Assessing Officer for further examination. However, the Tribunal's observations on the nature of these payments led to contradictions in the order, requiring clarification.

4. Disallowance under Section 14A of the Income Tax Act was another point of contention. The appellant did not press this issue for the assessment year in question, indicating a strategic decision.

5. The matter of adjudication under Section 145(2) regarding the purchase price representing cenvat credit was raised. The Tribunal's decision on this issue was challenged by the appellant, leading to its admission for further consideration along with another appeal.

6. Ultimately, the appellant pressed questions 'A' and 'G' for further hearing, while questions 'B', 'C', 'E', and 'F' were not pursued for the assessment year in question. The Tribunal's order was subject to detailed scrutiny and legal arguments, highlighting discrepancies and areas of disagreement between the parties involved.