2001 (11) TMI 250

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....e ground that the CIT(A) has erred in allowing the claim of Rs. 41,95,434 being expenses towards scientific research claimed to be exempt under s. 35(2)(ia). The assessee has claimed Rs. 41,95,434 under s. 35(2)(ia) of the Act. This claim was in respect of Central Research Development Laboratory, Dewari branch. The assessee received a total sum of Rs. 101.20 lakhs from the Department of Science an....

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.... assessee is not entitled to any deduction under s. 35(2)(ia) as the amount spent has been reimbursed by the Government of India, Department of Science and Technology. He has relied upon the order of AO. 3. The learned authorised representative submitted that the assessee had received a grant of Rs. 60,00,000 from the Department of Science & Technology, Government of India for the said laborato....

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....t has to be allowed, the basis has changed from year to year. It is admitted that the assessee has set up research laboratory at the Indian Telephone Industries, Bangalore, regarding thick thin film hybrid microcircuits. It is also admitted that the research laboratory is in connection with the business of the assessee. Therefore, the conditions stated in s. 35(1)(iv) are satisfied and the deducti....

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....ssessee will not debar the assessee from claiming deduction under s. 35(1)(iv). When the grant-in-aid is received it merges with the funds of the assessee. Thereafter, disbursements are made. It is not the case of the Revenue that the Government has directly paid for some capital equipment on behalf of the assessee. In such a case, there would be some difference in our appreciation of the problem.....