TaxTMI 
TaxTMI 
2015 (1) TMI 59
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.... income of Rs. 36,02,26,050 under normal provisions and Rs. 40,33,03,835 u/s. 115JB of the IT Act, 1961. The assessee claimed weighted deduction u/s. 35(2AB), in an amount of Rs. 15,93,96,792 reckoned at 150% of the R&D revenue expenditure of Rs. 10,62,64,528. On perusal of Form 3CL filed by the assessee during assessment proceedings, the Assessing Officer found that approval given by DSIR in this regard was only for an amount of Rs. 9,43,49,000. The Assessing Officer proposed to disallow an amount of Rs. 1,78,73,292 as shown at item (G) below as per details shown hereunder: Sl. No. Particulars Amount (Rs.) A. R&D expenses (revenue) as per P&L Account 10,62,64,528 B. R&D expenses (revenue) approved as per DSIR 9,43,49,000 ....
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....and in law in granting deduction to R & D expenses u/s. 37 when there are specific provisions of section 35(1)(i) and 36(1)(iv) for granting such deduction. 2. The CIT(A) erred on facts and in law in granting deduction to R & D expenses u/s. 37 though the same are not incurred for running the existing business. 3. The CIT(A) erred on facts and in law in granting deduction to expenses which are not recognised by the competent authority as R & D expenses. 5. The learned counsel for the assessee submitted that the amount in dispute has been incurred by the assessee as part of revenue expenses. As correctly held by the CIT(A), there no evidence or finding that the said expenditure is not incurred. The learned counsel submitted that in ....
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....estored to the file of A.O. for verification and allowance of the amounts. 7. Learned DR however, referred to the orders of the A.O. and submitted that unless assessee furnishes necessary certificates, no amount can be allowed and specifically referred to sub-section (2) wherein it was specifically mentioned that no deduction shall be allowed in respect of expenditure mentioned in clause (1) under any other provisions of this Act. 8. In reply, Ld. Counsel submitted that if the amount is not allowed under section 35(2AB), then, assessee is entitled to claim the allowance under section 37(1) as the amount is spent for the purpose of business and referred to the provisions of sections 37 and 35(2AB). It was his submission that assessee i....
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....g the allowability in the absence of certificates. Consequently there is justification for reopening of assessment. In these circumstances, we set aside the order of the CIT(A) and restore the issue to the file of the AO with a direction to allow weighted deduction u/s 35(2AB) as and when the assessee receives the approval under Form No. 3CM from the prescribed authority. Ground No. 4 is allowed for statistical purposes." 10. In this order, obviously the relevant Form 3CK and 3CL are even though submitted, the approval in Form 3CM has not yet been received by the assessee. In the case of ECIL vs. ACIT ITA. No. 1106/Hyd/2011 dated 25.09.2012 similar issue was considered by the Coordinate Bench as under : "17. As per the provisions of s....
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....B) to Rs. 46,89,03 lakhs and disallowing sum of Rs. 1,69,73,987 out of the claim made by the assessee. We, however, direct that in case DSIR corrects the amount of research and development expenditure on which the assessee is entitled weighted deduction for the assessment year under appeal, 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 inhouse 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, ....