The Hyderabad Bench of the Income-tax Appellate Tribunal held that:

(1) the “ tax sparing ” credit is allowed on the interest income under the India-Cyprus income tax treaty;

(2) payment for clinical trials is not taxable as “fees for technical services” under the India-United States income tax treaty; and

(3) post-merger, weighted deduction on scientific research expenditure is allowed to the merged entity.

The case is: Dr. Reddy’s Laboratories Ltd. Read a report on Tax sparing credit [PDF 435 KB] of KPMG