TaxTMI 
TaxTMI 
2012 (9) TMI 1215
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.... the following manner. "Deduction in respect of expenditure incurred on in-house Research & Development Units set up at Vapi and Turbhe 1. Revenue expenditure - Vapi Unit 39,59,744 - Thane Unit 85,21,721 [I] 64,81,465 2. Capital Expenditure i.e., Fixed assets (except land & bldg.) - Vapi Unit - - &nbs....
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....bsp; ---------- Weighted deduction @ 1.5 times of above (I+II) 4. The Assessing Officer required the assessee to furnish the evidence to prove that the necessary conditions have been fulfilled for claiming the weighted deduction under section 35(2AB). Thereafter, the Assessing Officer noted that the assessee could not furnish any evidence or explanation in support of his entitlement for weighted deduction except letters from the Ministry of Science & Technology according recognition of in-house R&D unit and its application for the certification of expenditure under section 35(2AB). The Assessing Officer observed that for the purpose of becoming eligible for the weighted deduction under section 35(2AB), it is mandatory on the part of the assessee to enter into an agreement with the prescribed authority, who has to submit its report in relation to the approval of the facility to the Director General and, therefore, non fulfillment of this condition in a case will attract the disallowance under the said section. He, th....
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....missioner (Appeals) came to the conclusion that the required approval for claiming deduction under section 35(2AB), has to be given by the Secretary, DSIR, in form no.3CM. The evidences filed by the assessee like letter of DSIR, dated 6th July 2001, copies of auditor's certificate as prescribed by the DSIR and details of expenditure incurred in R&D Centre qualified for production under section 35(2AB) and the annual report of the company, are not sufficient for getting a deduction under section 35(2AB) and accordingly dismissed the assessee's ground after observing and holding as under:- "2.7 Now clearly, the certificate of recognition filed is not the same as the order of approval in Form no.3CM. Also, no copy of the agreement entered into with DSIR or the application in Form no.3CK has been filed. In the circumstances, I am not in agreement with my predecessor that the prescribed authority has isued the approval and the assessee should not be made to suffer for mere technicalities. The fact is that the statutory approval in Form 3CM is not available on record. In the circumstances, I agree with the A.O. that the assessee is not eligible for weighted deduction under secti....
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....ion and weighted deduction for Thane unit should be disallowed. 9. We have carefully considered the rival contentions of the parties, perused the findings of the Commissioner (Appeals) as well as the material available on record. We find that this issue of weighted deduction under section 35(2AB) has been considered by the Tribunal in assessment year 2001-02, in assessee's own case in an appeal filed by the Revenue wherein in Paras-45 and 46, the Tribunal observed and held as under:- "45. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that recognition certificate to the assessee in respect of in house R&D Units of Turbhe and Vapi was granted by the Ministry of Science and Technology, Department of Scientific and Industrial Research, New Delhi up to 31.3.2003 vide letter dated 6.7.2001. This being so and keeping in view the ratio of the decision of the Hon'ble Gujarat High Court in Claris Lifesciences Ltd. (supra), wherein it has been held that the cut-off date mentioned in the certificate issued by the DSIR would be of no relevance. What is to be seen is that the assessee w....
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....l of the order of the Tribunal, we find that an identical issue had been decided by the Tribunal in an appeal preferred by the Revenue in assessee's own case. The relevant findings given in Paras-24 to 28, which are reproduced below for the sake of ready reference:- "24. The brief facts of the above issue are that during the course of block assessment proceedings, it was found that the assessee has failed to establish the purchase of fixed assets from M/s Pravin Metal Corporation, hence the AO keeping in view the finding recorded in the preceding years disallowed the claim of depreciation on such assets. 25. On appeal , the ld. CIT(A) while agreeing with the views of the AO confirmed the disallowance made by the AO. 26. At the time of hearing, the ld. Counsel for the assessee submits that the issue is covered in favour of the assessee by the order of the Tribunal in the assessee's own case in Aarti Industries Limited V/s ACIT and vice-versa (supra), therefore, the issue may be decided accordingly. 27. On the other hand, the ld. DR supports the order of the AO and the ld. CIT(A). 28. We have carefully considered the submissions of the riv....
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.... the decision of the Tribunal in Dancal (India) Private Limited in ITA No.5644/Mum/1997, directed the AO to treat the expenditure as revenue expenditure and al lowed the claim of the assessee. 134. At the time of hearing, the ld. DR supports the order of the AO. 135. On the other hand, the ld. Counsel for the assessee submits that the expenditure on computer software was on account of SAP accounting package, which the assessee was planning to introduce in place of its current Tally package. However, the said package did not work and the assessee scrapped the said package and continued with the Tally package, therefore, the expenditure incurred by the assessee on the said package was rightly al lowed by the ld.CIT(A) as revenue expenditure. The reliance was also placed on ( a) M/s Cisco Systems (India) P. Ltd. V/s ACIT in ITA No.431/Bang/2010 (AY:2002-03) dated 28.4.2011, (b) Amway India Enterprises V/s DCIT (2008)114 TTJ (Del)(SB) 476, (c ) CIT V/s GE Capital Services Ltd. 164 Taxman 46; 214 CTR 551(Del), (d) CIT V/s GE Power Services India Ltd. 171 Taxman 10(Del), (e) CIT V/s Southern Roadways Ltd. 304 ITR 84 (Mad), (f) Avaya Global Connect Ltd. 122 TTJ (Mum) 300....
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....ue had been decided by a co-ordinate bench of the Tribunal in assessee's own case for assessment year 2001-02, wherein the Tribunal, vide Paras-53 to 55, observed and held as follows:- 53. Brief facts of the above issue are that the Assessing Officer noted that the assessee company has claimed deduction u/s 80HHC as per proviso to subsection 3 of section 80HHC on sale of DEPB licences claiming that same are export incentives covered u/s 28(i i ia). However, the AO was of the view that the sale of DEPB l icence are not covered u/s 28 (i i ia) and accordingly not eligible for deduction as per proviso to sub-section 3 of section 80HHC. However, the same has to be excluded at the rate of 90% from the profits of the business computed under the head 'Profits and gains from business and profession' as per Explanation (baa) to sub-section 4B of section 80HHC. On appeal, the ld. CIT(A), however, directed the AO to treat profit on sale of DEPB license as export incentives and al low the deduction u/s 80HHC under proviso to section 80HHC(3) of the Act. 54. At the time of hearing, both the parties have agreed that this issue is covered by the decision of the Hon'ble Jurisdict....
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....7. The brief facts of the above issue are that the AO observed that the assessee excluded 90% of interest income of Rs. 29,98,048/- while computing the profit of business as per Explanation (baa) to sub ITA No. 8387/Mum/2004 ITA No.8554 /Mum/2004 ITA No.2662 /Mum/2006 ITA No. 3334 /Mum/2006, section (4B) of section 80HHC. However, the AO, in view of the Explanation (baa) of sub-section (4B) of section 80HHC and the decision of the Hon'ble Supreme Court in CIT V/s Dr. V. P. Gopinathan (2001) 248 ITR 449(SC) and the decision in CIT V/s Jose Thomas (2002) 253 ITR 553 (Ker) held that 90% of interest has to be reduced for computing the profit of the business and accordingly, he disallowed the same. On appeal, the ld. CIT(A) while observing that the assessee has failed to prove nexus, upheld the disallowance made by the AO. 98. The ld.CIT(A) further observed that the assessee has also raised the issue for reducing net rent as against 90% of gross rent considered by the AO. The ld. CIT(A) while observing that in line with the earlier grounds in respect of netting of interest, rejected the ground taken by the assessee in this regard. 99. At the time of hearing, the ld. Counsel for....