TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 377
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....uthorised Representatives (AR) on behalf of the Assessee and by Shri G.M. Doss, Departmental Representative (DR) on behalf of the Revenue. 3. Brief background and the facts of the case are that in this case, scrutiny assessment for A.Y. 2001-02 was completed u/s. 143(3) on 19.03.2004 by way of making addition of Rs. 16,61,674/- on account of research & development expense and Rs. 1,15,943/- on account of travelling and other expenses thereby assessing the total income at Rs. 29,90,287/- as against returned income of Rs. 12,12,670/-. Aggrieved by the said assessment, the assessee had preferred an appeal before the Ld. CIT(A). Ld. CIT(A) had upheld the addition made on account of disallowance of expenditure on scientific research and deleted....
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....ssee further submitted that the directions issued by the Tribunal was to verify whether the GBPL to whom the payment was made was having infrastructure or not, but the AO had travelled beyond the directions given by the Tribunal. The assessee further submitted that there are number of judicial pronouncements which have held that even if an assessee gets the work done through another entity, it is still allowable as expenses. The assessee further submitted that there was no question of siphoning off the assessee company's funds as it was shown to the AO that the payments were made in piecemeal by the assessee company only for the aforesaid purposes of cultivation and payment was made against the actual work done and services rendered by ....
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....atory for the aforesaid company to get certification from any authority. Per contra, Ld. DR relied upon the orders of the lower authorities. 3.4. We have gone through the facts of this case and order passed by the Tribunal in the first round as well as details and evidences submitted by the assessee before the lower authorities. It is noted by us at the very outset that Tribunal had sent this issue back to the file of the AO with the direction to consider details and evidences submitted by the assessee with respect to infrastructure and necessary research work for the development of Citronella oil before deciding this issue afresh. It is noted by us that perusal of the orders of the lower authorities reveals that the details have not been ....
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....ich the perfumes used by Wipro and Nirma were based since Citronella Oil had to be imported, it proved costly . The company has been carrying out consistently some research with a view to develop new perfumery compounds to be util ized in soap industry. In that context, we are enclosing the extract of the copy of the book named "Synthetic Perfumes" detailing the process of making the citronella oil from the Citronella/lemon grass as required by you. 2. Infrastructure: With above in mind our client Company looked for appropriate lane to carry out the activity. Some agriculturists and biotechnologists suggested that the land at Baramati is the best suitable land for the cultivation of the lemon grass. Our client was introduced to one Shri....
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....etc, and cash vouchers on sample basis to indicate the expenses incurred for the plantation done during the cultivation period. We are also enclosing the attendance register of the various persons involved in the cultivation activity as mentioned is enclosed to conf irm the manpower deployed for the above cultivation. We would like to place before you the fact that unfortunately a lot of other documents pertaining to the year under assessment mostly related to this activity was lost in the water logging on 26th July 2005 which were stored at our office for being produced before the AO. To substantiate this, we are attaching herewith the copy of aff idavit in that connection and we also produce before you various photographs taken at the t....
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....n the soap industry. It is also not disputed that Citronella oil was one of the major raw materials to be used as a new perfumery compound to be used in the manufacturing of soap. It is also not disputed that Citronella oil is extracted from a particular variety of Lemon Grass. It is also not disputed that the aforesaid company namely Greenclone Biotech P. Ltd. (GBPL) was set up by Shri Nanasaheb Bhosale, who is from Baramati and is an Agriculture Consultant. Under these circumstances, in our opinion, these expenses were incurred under the genuine circumstances. Thus, only grievance of the lower authorities left to be addressed was with regard to availability of requisite infrastructure of the said company. In this regard, Ld. Counsel drew ....