TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 396
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....ssee. Two appeals are thus preferred on different orders of CIT(A) on the claims as in other years. 2. We have heard the Ld. Counsel and learned D.R. and perused the paper book. 3. DEDUCTION U/s. 35(2AB) : With respect to claim under section 35(2AB) in all three years, assessee has claimed weighted deduction at 150% of amounts spent under scientific research. In A.Y. 2005-06 the amount claimed at 100% debited to P & L account was Rs.61,16,778/- with a weighted deduction of Rs.30,58,384/- (Total claim Rs.91,75,152/-). In A.Y. 2006-07 the amounts claimed at 100% was Rs.67,18,994/- and weighted deduction was Rs.33,59,497/- (Total claim Rs.1,00,78,491/-). Likewise, in A.Y. 2007-08 also the amount claimed at 100% was Rs.82,86,957/- and weighted deduction was at Rs.41,43,478/- (Total claim Rs.1,24,30,435). 4. The A.O. disallowed the claim on the reason that assessee did not furnish Form 3CM and 3CL issued by the Prescribed Authority to examine the fulfillment of the conditions in section 35(2AB). It was also one of the reasons that DSIR has not approved the research facility and therefore, not only the weighted deduction but also the basic deduction was disallowed. The Ld. CIT(A) afte....
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....ere is no disallowance under section 35(2AB) as the assessee had relevant approval at that point of time. In A.Y. 2004-05 since the renewal of R & D has not come in time, the A.O. disallowed the claim and has not allowed even 100% of the amount which otherwise is eligible under the provisions. The ITAT after considering the rival contentions in assessee's own case in ITA.No.272 & 285/Hyd/2011 by order dated 13.11.2013 has directed the A.O. to examine and allow the weighted deduction as under : 23. We have heard the arguments of both the parties, perused the record and have gone through the orders of the revenue authorities. It is observed that the statutory formalities for getting approval u/s 35(2AB) are that application in Form No. 3CK and 3CL are to be submitted and an order of approval has to be obtained in Form No. 3CM from the prescribed authority. We find that the assessee has not furnished Form No. 3CM either before the revenue authorities or before us for claiming weighted deduction u/s 35(2AB). The AO has allowed this claim earlier without examining the allowability in the absence of certificates. Consequently there is justification for reopening of assessment. In these ....
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....eal, corresponding weighted deduction u/s.35(2AB) shall be granted on receipt of the clarification from DSIR. Consequentially if the assessee is able to prove that any amount of expenditure in their in-house research and development facilities was omitted to be considered by the DSIR for weighted deduction the same may be allowed as a deduction u/s.35/ 37 of the Act. With this observation we dismiss the appeal of the assessee on this issue." 11. Therefore, we are of the opinion that assessee is entitled for 100% of the allowance at present and as and when received Form 3CM, weighted deduction may be allowed. With these observations/directions, A.O. is directed to allow 100% of the amount immediately and weighted deduction as and when Form 3CM received. 12. Assessee also made an alternate contention that this amount is also eligible for deduction under section 37(1). It was the contention of the A.O. that by virtue of section 35(2A)(ii) of the Act, assessee would not be eligible for deduction under any other provisions of the Act. Sub-clause 2 of section 35(2AB) can only be invoked when the amount is allowed under section 35(2AB). In case the amount is not allowed under section 35....
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....or product development in A.Y. 2003-04 was allowed by the CIT(A) and Revenue has came in appeal in that year before the Tribunal and the Tribunal vide order dated 04.05.2012 in ITA.No.997 & 1032/Hyd/2010 in assessee's own case considered the Revenue appeal and confirmed the order of the CIT(A). The relevant order in para 5 is as under : "5. We heard the parties and perused the material available on record. The paper book filed by the assessee essentially contains the details of the product development expenditure along with the supportive documents and bills. On a perusal of page 1 of the paper-book, it is noticed that payments were made to universities and institutions towards testing charges, field trials, chemical tests, disease controls, bio-efficacy test, chemicals etc. The total amount expended works out to Rs.56,76,389, and it has two components, namely, payments made to universities/institutions of Rs.21,81,750 and payments made towards chemicals of Rs.34,91,639. We have also perused the test reports/control reports submitted by the institutions/universities. In our considered opinion, the amount in question was incurred towards scientific research only. In any event, it i....
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.... insecticides and they have to be sent to the field for trial/tests as per the Governmental regulations existing in our country. For this purpose, the assessee needs to incur expenditure on the approved institutions/universities as done by the in the instant case. Therefore, we are of the opinion that the order of the CIT(A) is fair and reasonable and does not call for any interference. We accordingly uphold the same, rejecting the grounds of the Revenue.. 15. Similarly, in A.Y. 2004-05 in assessee's own case in ITA.No.272 & 285/Hyd/2011 dated 13.11.2013, since assessee has furnished necessary details in the paper book, the ITAT directed the A.O. to grant weighted deduction after verifying the necessary details. This issue has been discussed by us in ITA.No.272 & 285/Hyd/2011 dated 13.11.2013 in para 30 as under : 30. We have heard both the parties and perused the record. The assessee at page 33 of the paper book filed list of payments i.e., payees list consisting of various Universities and Institutions for purpose of testing and at page 36 of the paper book, sample note for approval from Central Rice Research Institute, Cuttack has been produced. However, the learned D.R. submi....