TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether the portion of research and development expenditure not approved for weighted deduction under section 35(2AB) of the Income-tax Act, 1961 could nevertheless be allowed as a normal business expenditure under section 37(1) of the Act.
Analysis: The expenditure was incurred on salary, material consumption and other items for in-house research and development. The prescribed authority certified only part of the expenditure in Form 3CL for weighted deduction under section 35(2AB), and the balance was therefore not eligible for the enhanced deduction. However, the genuineness of the underlying expenditure was not doubted, and the mere fact that a part of the claim did not qualify for weighted deduction did not, by itself, make the amount non-deductible as business expenditure.
Conclusion: The disallowance of weighted deduction for the uncertified portion was upheld, but the balance amount was directed to be allowed under section 37(1) of the Income-tax Act, 1961.
Final Conclusion: The appeal succeeded only to the extent that the disallowed research and development expenditure was held deductible as normal business expenditure, while the denial of weighted deduction remained intact.
Ratio Decidendi: Expenditure incurred for business purposes does not cease to be deductible under section 37(1) merely because it is not certified for weighted deduction under section 35(2AB), where its genuineness is not in dispute.
TaxTMI 
