International Flavours and Fragrances India Ltd. Formerly known as Bush Boake Allen (India) Ltd vs The Deputy Commissioner of Income Tax Special Range

Chitra Venkataraman, J.—Following are the substantial questions of law raised by the Assessee in respect of the assessment year 1991-92:

Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the Research and Development expenses ought

to be deducted while computing the income derived from the New Industrial Undertaking for the payment of computing relief u/s 80HH and 80-I?

Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that Research and Development expenses were

related to the profits derived by the unit eligible for relief u/s 80HH and 80-I?

The counsel for the Assessee, as well as the counsel appearing for the revenue pointed out that in respect of the same Assessee for the

assessment years 1989-1990 and 1990-1991, this Court in its decision reported in Bush Boake Allen (India) Ltd. Assistant Commissioner of

Income Tax (273 ITR 152 (Mad.) and in an unreported decision in M/S. International Flavours and Fragrances India Ltd. Formerly known as

M/S. Bush Boake Allen (India) Ltd v. The Assistant Commissioner of Income Tax (T.C.(A) No. 548 of 2004), respectively, had set aside the

order of the Tribunal and remitted the matter back to the Tribunal to consider whether there was research and development undertaken regarding

the product that is manufactured at the Chithoor Unit. This Court pointed out that if the 3 research did not pertain to the product manufactured at

Chithoor, then the allocation of the expenses to Chithoor unit will be justified. The Tribunal followed the earlier orders in the Assessee''s case.

Hence, following the orders of this Court, in respect of the same Assessee on the very same issue, we set aside the order of the Tribunal and

remit the back to the Tribunal for fresh consideration. The Tax Case (Appeal) is allowed. No. costs.