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5. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs. 10,04,36556/- being R & D expenses allocated to Baddi & Solan Unit of the assessee.

6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 11,88,53,122/-, being interest expenditure allocated to Baddi & Solan units on the basis of sales turnover ratio, while computing deduction u/s 80IC.

Vide questionnaire dated 11.06.2013, the assessee was asked to furnish details of R&D expenses claimed in Baddi & Solan Units and explain why their weighted deduction should not be adjusted against profit of these units. The assessee vide letter dated 29.01.2014 submitted as follows:

"A note on allocation of Research & Development expenditure The assessee has 2 units eligible to claim deduction of profit u/s 80IC of the Act i.e. i)Baddi and ii) Solan In the original Return, the assessee claimed deduction of Rs.1,381,861,388/- u/s 80IC of the act in respect of both the units i.e. in case of Baddi Unit Rs.1,057,498,180/- and Solan Unit Rs.324,363,208/- but restricted the deduction to the extent of Gross Total Income Rs. 1,298,123,164/-.

Revised ROI was filed on 29.03.2012 to revise the claim for deduction of profit u/s 80IC of the Act by withdrawing allocation of R&D expenses, in respect of 80IC Unit i.e. at Baddi and Solan and also some other changes. As per revised return, the claim for deduction of profit u/s 80IC of the Act has been revised to Rs. 1,567,672,213 of both the units, but deduction is restricted to the extent of Gross Total Income of Rs. 1,247,957,350/-.

M/s. Glenmark Pharmaceuticals Ltd.

Under the provision of Income Tax Act, Research and Development expenses are not allocable to 80IC units. These R&D expenses are directly or indirectly not connected with the manufacturing operation carried out at the above units. The Research and Development expenses incurred had no connection with the business of the above 2 units nor any benefit is received by them from the said research.

All the Research and Development expenses were incurred at approved R&D Centres situated at Mahpe and Sinnar and not at 80IC Units.