2024 (11) TMI 77

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....after in short "Ld.CIT(A)"] for the A.Y.2012-13 & 2013-14. Since the grounds raised by the assessee for both these appeals are identical in nature, these appeals are being clubbed and a consolidated order being passed. We now take up the appeal in ITA No. 307/VIZ/2023 for the A.Y.2012-13, as the lead appeal. ITA No. 307/VIZ/2023 (A.Y. 2012-13) 2. This appeal is filed by the assessee against order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter in short "Ld.CIT(A)"] vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1057219641(1) dated 19.01.2023 for the A.Y.2012-13 arising out of order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (in short 'Act') dated 22.11.....

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.... the questionnaire and served on the assessee on 12.09.2018. Since there was no compliance from the assessee, show-cause notice dated 12.11.2018 was issued through ITBA Portal. Assessee failed to respond to the show-cause notice. Thereafter, the Assessing Officer concluded the assessment by disallowing the additional claim of weighted deduction under section 35(2AB) of the Act for Rs. 1,00,00,000/-. 4. On being aggrieved by the order of the Assessing Officer, assessee filed an appeal before Ld. CIT(A). Before Ld. CIT(A), assessee filed the written submissions stating that the amount received from DSIR was not a grant or subsidy but unsecured loan which was to be repaid in five equal instalments and hence claim made under section 35(2AB) ....

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.... Authorised Representative [hereinafter "Ld.AR"] submitted that Ground No.2 is not pressed and hence the same is dismissed as not pressed. 8. Ground Nos. 3 & 4 are with relation to the disallowance of excess deduction claimed under section 35(2AB) of the Act. On this issue, Ld.AR submitted that, assessee has received a soft loan from DSIR vide agreement dated 23.11.2010 for the purpose of Manufacture of Magnesium & Calcium Metal Powder as per specifications. Ld.AR argued that as per Clause 4(f) of the said agreement, assessee is liable to pay to National Research Development Corporation [in short 'NRDC'] a sum equivalent to 1.3 times of money actually disbursed by DSIR from the start of commercial sale of the product. Ld.AR submitted tha....

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....e has taken a grant-in-aid from DSIR which was repayable in the form of royalty aggregating to 1.3 times of the money actually received by the assessee. Assessing Officer therefore considered the amount as royalty and observed that grant-in-aid received by the assessee cannot be considered for the purpose of weighted deduction. However, we find that there is merit in the argument of the Ld.AR that in the earlier assessment year assessee has received sum of Rs. 70,00,000/- as soft loan on similar terms and conditions as entered into tripartite agreement during the impugned assessment year. Further the Ministry of Science and Technology has also confirmed that the funds provided by them is in the nature of soft loan and not a grant-in-aid for....