TaxTMI 
TaxTMI 
2021 (1) TMI 71
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....e, Whether the Id. CIT(A) is justified in deleting the disallowance made by the AO of the expenditure incurred on the software development process claimed u/s. 35(1)(iv) of the IT Act? 3 For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored. 4 The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal. Brief facts of the case are as under: 2. Assessee is a private limited company having undertaking registered under software technology parks in India. During the year under consi....
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.... Act because, these expenditures are incurred by assessee on scientific research and related to business, within the meaning of section 43(4) of the Act. 4. Ld. AO rejected submissions advanced by assessee. Ld. AO was of the opinion that, assessee could not explain whether, such expenditure is based on specific requirement of client and had nexus with revenue if any on account of sale of product. Ld. AO held that assessee's activity of product development did not fall within the meaning of scientific research as given under section 43(4) of the Act. Ld. AO accordingly, disallowed the claim of assessee. 5. Aggrieved by order of Ld. AO assessee preferred appeal before Ld. CIT(A). Ld. CIT(A) decided the issue in favour of assessee by obs....
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....tion and Tejas Networks. Following the decisions of the jurisdictional High Court as well that of the ITAT, Delhi in the above cited cases, the appellants claim for deduction u/s. 35 is allowed. This ground of appeal is allowed." 6. Aggrieved by order of Ld. CIT(A) revenue is in appeal before us now. 7. Ld. CIT DR at the outset submitted that, authorities below has not discharged requirements specified under section 43(4)(ii) regarding ownership of product development. He submitted that, in the event, products developed by assessee is owned by assessee, benefit available under section 35(1)(iv) will not be available to assessee. 8. At this juncture, Ld. AR submitted that, identical issue in earlier assessment year has been remanded by th....
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....cts and circumstances of the case, as well as in the interest of justice, we set aside this issue to the record of CIT (Appeals) for limited purpose of verifying the real nature of the expenditure incurred by the assessee whether it is for the R & D activity of the assessee. The CIT (Appeals) has to decide this issue after verification and examination of the relevant record and in the light of the decision of Hon'ble jurisdictional High Court in the case of Talisma Corporation Pvt. Ltd. (Supra). Needless to say the assessee shall be afforded an opportunity of hearing." 11. We note that, in appeal before us, the Ld. AR relied on decision of Hon'ble Karnataka High Court in case of Talisma Corporation Pvt. Ltd., reported in (2013) 40 ....