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We nevertheless make further submissions on various other aspects on a without prejudice basis and without diluting the contention of the Appellant that the entire addition is on mistaken facts and hence, needs to annulled ab initio.

1.3 It is reiterated that the Appellant has, in the previous year ended 31.3.2012 relevant to the AY 2012-2013, acquired the Domestic Formulation Undertaking (DFU) under the arrangement of spin off from its holding company, SPIL. The DFU comprised various assets including intangible assets. The intangible assets so received under the spin off arrangement were recognized for the first time by the Appellant at a value reflective of their fair value based on the express stipulation in the scheme of spin off duly approved by the Hon'ble High Court of Gujarat as well as High Court of Bombay.

1.4 It appears that the Assessing Officer has failed to appreciate the distinction between revaluation and first-time recognition of intangible assets in books of accounts. In the present case, pursuant to the receipt of intangibles assets by the Appellant by virtue of the scheme of spin off, the Appellant has recognized the intangibles assets so received for the first time in its books of I.T.A Nos. 1464 & 1465/Ahd/2018 & Ors A.Ys. 2013-14 & 2014-15 Page No 25 Sun Pharma Laboratories Ltd. Vs. vs. DCIT accounts at their respective fair values to reflect the true position of the Appellant's assets and liabilities as on 31.03.2012. This, in no way, can be considered similar to the revaluation as understood in the accounting language. The recording of intangibles in the books of accounts by the Appellant is the process of initial recognition of the assets and not revaluation of assets.

2.2 However, the Assessing Officer has stated in the order that the Appellant got the intangible assets subsequently revalued as on 01.04.2012 which is a sheer contradiction to the facts of the case wherein the intangible assets have been accounted at fair value as on 31.03.2012, the date of spin off itself. Thus, the relevant year to question the fair valuation of intangibles is AY 2012-13 rather than AY 2013-14.

3. Accounting treatment is in consonance with generally accepted accounting principles 3.1 During the year under consideration, the Appellant, in respect of the intangible assets acquired by it under spin off, has charged a sum of Rs. 1523.975 crores towards depreciation of the intangible assets.

3.2 At the outset, it is stated that there is no specific accounting treatment prescribed in the Indian Accounting Standards for such kind of transactions i.e. spin off. Therefore, we try to gauge whatever guidance is available from the generally accepted accounting framework.