TaxTMI 
TaxTMI 
2024 (12) TMI 851
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly. The common issued involved in the two appeals is disallowance u/s. 35(2AB) of the Income Tax Act (hereinafter referred as 'the Act'). Both the appeals were heard together and are being disposed of vide this common order for the sake of convenience. ITA No. 382/Ahd/2020 A.Y. 2013-14 2. The brief facts involved in this appeal is that the return of income was filed on 28-11-2013 declaring total income of Rs. 3,68,57,870/-. The assessment was completed u/s. 143(3) on 29-01-2016 at total income of Rs. 3,86,47,050/-. As various additions were made during the course of assessment, the assessee had preferred appeal before the first appellate authority which has been decided by the ld. CIT(A) vide the impugned order dated 28/09/2022. Aggri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he return of income which was @ 200% of the actual expenditure incurred on scientific research on in-house research and development facility as approved by the prescribed authority. The Assessing Officer found that the Department of Scientific and Industrial Research (DSIR) had approved the expenditure u/s. 35(2AB) as per Form No. 3CL to the extent of Rs. 29,51,000/- only and, therefore, the assessee was eligible for deduction of Rs. 59,02,000/- (200% of the expenditure so approved). The excess deduction of Rs. 14,39,156/- claimed u/s. 35(2AB) of the Act was disallowed by the Assessing Officer, which was upheld by the ld. CIT(A). The assessee had taken an alternate plea before the ld. CIT(A) that only difference between the revenue expendit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in-house research and development facility on land, building, capital and revenue expenditure every year to the prescribed authority in Annexure-2 of Form no. 3CK and prescribed authority was required to quantify the expenditure eligible for weighted deduction in Part-B of the Form No.3CL. 18. What derives from the above, therefore, is that consequent to amendment to section35(2AB) by the Finance Act, 2015 w.e.f. 1 4.2016, requirement of law was that the prescribed authority had to quantify the quantum of eligible expenditure incurred on in-house research and development facility by the assessee. But prior to that there was no such requirement in law and the prescribed authority was the only required to grant approval to the in-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n inhouse research and development facility was required to be quantified by the prescribed authority i.e. DSIR. Prior to 01-04-2016, there was no such requirement for quantification of the eligible expenditure by the DSIR for claiming the deduction. Merely because DSIR had quantified such expenditure in the current year, which is prior to 01-04-2016, the same was not binding on the revenue authorities. Therefore, the Revenue was not correct in restricting the deduction u/s. 35(2AB) of the Act on the basis of the amount quantified by the DSIR in their approval. In view of this provision of the Act as well as the decision of the Co-ordinate Bench of this Tribunal in the earlier years cited supra, disallowance u/s. 35(2AB) of the Act as uphel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2.3 Without prejudice to above, the Learned CIT (A) has also failed to appreciate that even the DSIR has also confirmed expenditure of Rs. 5,53 lakhs on clinical trial expenditure in Form No 3CL. 3. The Ld. CIT (A) while appreciating the fact that the R&D facility has been approved and therefore, the appellant was entitled to weighted deduction, he has erred in not giving any directions to allow weighted deduction for the capital expenditure on such facility which is entitled to weighted deduction u/s 35 (2AB). 4. The appellant craves leave to add to amend or to raise any further grounds of appeal as case may arise." 10. In the course of hearing, the ld. Authorized Representative submitted that the assessee does no....