TaxTMI 
TaxTMI 
2024 (2) TMI 267
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....ction 68 of the I.T. Act, 1961." 3. Briefly stated the facts are that the assessee a Pvt. Ltd. Company engaged in the business of manufacture of catalytic converters for various diesel, petrol and CNG engines, filed its return of income on 7.02.2015 declaring 'NIL' income under normal provisions of the Act and book profit under section 115JB of the Income Tax Act, 1961 (the Act) at Rs. 3,71,88,159/-. The assessment was completed under section 143(3) on 14.12.2016 determining the income at Rs. 11,32,54,030/- under normal provisions of the Act and book profit at Rs. 3,71,88,159/- as declared by the assessee. While completing the assessment the Assessing Officer denied claim for deduction of Rs. 8,83,89,286/- under section 35(2AB) of the Act on the ground that the prescribed authority has not issued approval for qualifying for weighted deduction in Form No. 3CL until the date of completion of assessment as required under sub section 6(d) of section 35(2AB) of the Act. The assessee preferred an appeal before the ld. CIT (Appeals). In the course of appellate proceedings the assessee furnished Form No. 3CL issued by DSIR on 24.01.2017 approving capital expenditure of Rs. 45.70 lakhs and....
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....extent of Rs. 1,35,24,607/- which was not approved for weighted deduction by DSIR was directed to be allowable as Revenue expenditure under section 37 of the Act while computing the income of the assessee by the ld. CIT (Appeals) observing as under:- "4.4 I have gone through the facts of the case and the submission made by the AR. The AR has contended that the issue of various Forms like 3CM & 3CL is procedural in nature and does not take away the claim of deduction u/s 35(2AB) of the Act. Moreover, Form 3CL issued by DSIR on 24.01.2017 has already been admitted as additional evidence and from this Form it is observed that DSIR has approved Capital expenditure of Rs. 45.70 lakhs and Revenue expenditure of Rs. 261.62 lakhs (total Rs. 307.32 lakhs) as eligible expenditure u/s 35(2AB) of the Act. It is further observed that early issue of this Form by DSIR is not in the hands of the appellant. The AR has also contended that the AO had written a letter to the Secretary, DSIR in which the AO advised DSI consider various factors highlighted by him in his letter dated 22.10.2016 before issue of approval in Form No. 3CL and the DSIR has issued Form 3CL on 24.01.2017 after considering the....
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....en incurred for the purposes of the business and therefore the same are allowable as revenue expenditure. In view of this, the balance expenses of Rs. 1,35,24,607/- are allowable as revenue expenses and the AO is directed accordingly. The grounds of appeal are therefore, partly allowed." 7. We further observe that an identical issue came up for consideration before the Tribunal in assessee's own case for the assessment year 2013-14 wherein the Tribunal held as under:- "2. The company is engaged in developing suitable and contemporary technologies to meet the various emissions norms as per International Standards from its own R&D set-up located at Plot No. 4, 20th Milestone, Mathura Road, Faridabad. 3. During the year under consideration in its computation of income, the assessee has added R&D expenses amounting to Rs. 3,85,19,630/- and deducted R&D allowable expenses amounting to Rs. 13,37,72,569/-. 4. The assessee has submitted before the AO that as per the provisions of section 35(2AB) of the Act weighted deduction of 150% to be allowed for expenditure (both capital and revenue) incurred on in-house research and developments by companies where such facilities are approved ....
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....ions of the Income Tax Act." 8. In view of what is discussed above, we do not see any infirmity in the order passed by the ld. CIT (Appeals) in allowing the weighted deduction under section 35(2AB) of the Act to the extent of Rs. 6,14,64,000/- and also deduction under section 37(1) of the Act in respect of the Revenue expenditure of Rs. 1,35,24,607/-. Thus we sustain the order of the ld. CIT (Appeals) and reject this ground of appeal of the Revenue. 9. Coming to ground No. 2 of the appeal of the Revenue i.e. deletion of addition made under section 68 of the Act, the facts are that the Assessing Officer while completing the assessment noticed that assessee company received un-secured loan of Rs. 2.20 crores from M/s. B. D. Vanijya Udyog Pvt. Ltd., a Kolkata based company. The assessee was required to furnish evidence in support of identification of the loan creditor and to establish the creditworthiness and genuineness of the transaction. The assessee furnished all the relevant documents before the Assessing Officer to prove the identity, creditworthiness and genuineness of the transaction. The Assessing Officer also issued commission to DDIT (Investigation Wing) Kolkata to verify....
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....ditworthiness is proved and, therefore, the ld. CIT (Appeals) has rightly deleted the addition made under section 68 of the Act. 12. Heard rival contentions perused the orders of the authorities below and evidences furnished before us. We see considerable force in the submissions of the ld. Counsel for the assessee. In the course of assessment proceedings the assessee furnished copy of Income Tax Return of the creditor M/s. B. D. Vanijya Udyog Pvt. Ltd. confirmation from the creditor, copy of balance sheet of the creditor, extracts of the bank statement of loan creditor to establish the identity, creditworthiness and genuineness of the transaction. We further observe that M/s. B. D. Vanijya Udyog Pvt. Ltd. the loan creditor in the course of investigation proceedings with DDIT, Investigation Wing, Kolkata, furnished copy of ITR for assessment years 2009-10 and 2014-15, audited financial statements and tax audit report for the year ended 31st March, 2014, copy of ledger account of M/s. Ecocat India Pvt. Ltd. in the books of M/s. B. D. Vanijya Udyog Pvt. Ltd. for financial year 2013-14, transaction statement from M/s. Ecocat India Pvt. Ltd., bank statement high-lighting the debit and....
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.... addition observing as under:- "5.3 I have considered the facts of the case and the submission made by the AR. It has been submitted that the appellant has already filed various documents including the copy of ITR confirmation, Balance sheet and Bank statement of the lender company i.e. M/s BDVU to the AO. The documents furnished by the lender company independently to the DDIT(Inv), Kolkata, after issue of commission by the AO, have also been furnished as additional evidence during appellate proceedings (which has already been admitted above)It is observed from the Balance sheet of BDVU that the said company has Reserves & Surplus of Rs. 10.62 crores and Share Capital of Rs. 5.02 crores and the said company has given loans & advances of Rs. 10.62 crores out of which a sum of Rs. 2.20 crores has been given to the appellant company. It is further observed that the le company has filed ITR showing total income of Rs. 29,63,710/- during AY 2014-15 said company is registered as an NBFC and has obtained over draft limit of Rs. 7 crores from Karnataka Bank in respect of which the appellant has furnished certificate from Karnataka Bank as additional evidence and in the said certificate, ....