Appeal allowed for R&D expense deduction despite delayed certificate issuance

The Tribunal allowed the appeal of the assessee, holding that the delay in receiving the certificate for research and development expenses did not prejudice the claim for weighted deduction under section 35(2AB) for the assessment year 2005-06. The decision was based on a similar ruling by the Gujarat High Court in a previous case.

---

---

Issues involved: Appeal against assessment of expenses relating to research and development u/s 35(2AB) for assessment year 2005-06.

Summary:
1. The assessee, engaged in manufacturing automotive air-conditioning systems, claimed deduction u/s 35(2AB) and revenue expenses for research and development. The AO disallowed the claim of Rs. 3,83,62,003 for absence of Form No. 3 CL, denying the weighted deduction of 150%.
2. The CIT(A) upheld the disallowance, citing the late application for recognition of in-house R&D facility and absence of Form 3 CL issued by the Department of Science.
3. The assessee contended that the delay in receiving the certificate was beyond their control and argued that the decision of the Gujarat High Court in "CIT v. Claris Lifesciences Ltd." should apply to their case.
4. The Tribunal noted that the application for R&D facility approval was made within the relevant financial year, even though the Form 3 CL was received in a subsequent year.
5. Relying on the Gujarat High Court decision, the Tribunal held that the assessee was entitled to the weighted deduction claimed u/s 35(2AB), as the delay in receiving the certificate did not prejudice the assessee's claim.
6. Consequently, the appeal of the assessee was allowed, and the decision was pronounced on 22.03.2010.

---