The ITAT ruled that denial of weighted deduction under s.35(2AB)...

The ITAT ruled that denial of weighted deduction under s.35(2AB) does not prevent the assessee from claiming normal deduction for R&D expenditure under s.35(1)(i) and s.35(1)(iv). The Tribunal directed the AO to allow normal deduction for capital R&D expenditure under s.35(1)(iv) and delete the corresponding disallowance. Regarding s.80IC deduction for the Pantnagar plant, the ITAT held that profits reported in stand-alone audited financials were based on sound accounting principles, rejecting the AO's allegation of artificial profit creation. The Tribunal confirmed additional depreciation under s.32(1)(iia) for pollution control and energy-saving equipment as these qualified as "plant & machinery." Finally, following Sobha Developers Ltd., the ITAT held that s.14A disallowances cannot be added to book profit under s.115JB.

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