Dy. Cit vs Sarabhai Piramal Pharmaceuticals Ltd. on 27 January, 2006
37. We have carefully perused the definitions of Trademarks given either in different Act or explained through various judgments of the Apex Court and High Courts and we are of the view that the Trademark is not alien to the patent right as there was a direct link between the patent right and trademark. The patent right cannot be identified in a pharmaceutical field without having its own name which is a trade mark, meaning thereby, trademark and the patent rights moves together and if trade mark is purchased, the patent right with respect to that particular trade mark is also passed on to the buyer in the transactions of a pharmaceutical fields. Turning to the case in hand, in the light of the above proposition, we find that revenue has not raised the dispute with regard to the acquisition of a trademark against a lump sum consideration of Rs. 35 crores. Revenue has simply disputed that it was a transfer of only trademark and not a patent right and the assessee cannot take the benefit of provisions of Section 35A of the Income Tax Act. But, in the light of the above propositions laid down by the Apex Court and various High Courts, we are of the view that the patent right and the trademarks are uniform and they cannot be differently treated in a pharmaceutical field. As such, the acquisition of a trademark amounts to the acquisition of patent right also in a pharmaceutical field inasmuch as, the patent right lost its identity on transfer its trademark, as it has no independent identity in the pharmaceutical field. A professional in a pharmaceutical field can visualise a formula or a composition through a trademark of a particular medicine. We, therefore, of the view that through acquisition of a trademark, assessee has also acquired the patent rights from the ASE, as such, it is, entitled for .deduction under Section 35A of the Income Tax Act on a total consideration paid in lieu of acquisition of trademark.