Tribunal grants relief on R&D, clinical trial expenses, MAT credit, interest computations, and dividend distribution tax

The Tribunal partly allowed the appeals of the assessee, providing detailed directions on various issues. The disallowance of expenditure on gifts and sales promotion was dismissed as not pressed. The Tribunal allowed weighted deduction for Research & Development expenditure and clinical trial expenses. It directed the inclusion of surcharge and education cess for MAT credit. Additionally, the Tribunal ordered the verification and deletion of incorrect interest computations under sections 234A and 234C, and instructed the examination and refund of dividend distribution tax in line with legal precedents.

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Issues Involved:

1. Disallowance of Expenditure incurred on gifts & Sales promotion
2. Normal deduction for Research & Development expenditure
3. Allowability of education cess paid on Income Tax
4. Allowability of education cess paid on dividend distribution tax
5. Weighted deduction for expenditure on Research & Development u/s.35(2AB)
6. Short Grant of TDS
7. Weighted deduction u/s.35(2AB) for clinical Trial expenditure
8. Allowance of MAT credit to include surcharge & Education cess and Carry forward & set off of MAT credit accordingly
9. Incorrect computation of interest u/s.234A
10. Refund of DDT
11. Incorrect computation of interest u/s.234C

Summary:

Disallowance of Expenditure incurred on gifts & Sales promotion:
The assessee did not press the issue of disallowance of expenditure incurred on gifts and sales promotion. Accordingly, the grounds pertaining to these issues were dismissed as not pressed.

Normal deduction for Research & Development expenditure:
The issue of normal deduction for Research & Development expenditure was raised but not pressed for the assessment years under consideration.

Allowability of education cess paid on Income Tax:
The issue of allowability of education cess paid on income tax was not pressed by the assessee for the assessment years under consideration.

Allowability of education cess paid on dividend distribution tax:
The issue of allowability of education cess paid on dividend distribution tax was not pressed by the assessee for the assessment years under consideration.

Weighted deduction for expenditure on Research & Development u/s.35(2AB):
The Tribunal held that prior to the amendment effective from 01/07/2016, the weighted deduction under section 35(2AB) cannot be restricted to the amount as mentioned in Form 3CL certified by DSIR. The assessee should be allowed the weighted deduction as claimed in the return of income. This decision was applied mutatis mutandis for AY 2013-14 to 2015-16.

Short Grant of TDS:
For AY 2013-14 and AY 2015-16, the Tribunal directed the Assessing Officer to verify and allow the claim of the assessee for TDS credit in accordance with law.

Weighted deduction u/s.35(2AB) for clinical Trial expenditure:
The Tribunal allowed the additional 100% deduction for clinical trial expenses incurred by the assessee, as the amount is eligible for weighted deduction under section 35(2AB) and the approval by DSIR of the facility is available on record.

Allowance of MAT credit to include surcharge & Education cess and Carry forward & set off of MAT credit accordingly:
The Tribunal directed the Assessing Officer to include surcharge and education cess for the purpose of giving credit under section 115JAA, following the decision of the coordinate bench in the case of Tata Motors Ltd vs DCIT.

Incorrect computation of interest u/s.234A:
The Tribunal directed the Assessing Officer to verify and delete the interest under section 234A for AY 2014-15, as the assessee filed the return of income before the due date.

Refund of DDT:
The Tribunal directed the Assessing Officer to examine the facts of the assessee's case in light of the decision of the Hon'ble Gujarat High Court in the case of Torrent Pvt. Ltd. vs CIT and process the refund of DDT along with statutory interest in accordance with law.

Incorrect computation of interest u/s.234C:
The Tribunal directed the Assessing Officer to verify and delete the interest under section 234C erroneously charged, as the interest is charged for the shortfall in the payments of advance-tax on the income returned and not income assessed.

Conclusion:
The appeals of the assessee were partly allowed. The Tribunal provided detailed directions for each issue, ensuring fair consideration and adherence to legal precedents.

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