2025 (6) TMI 1858

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....duction of Rs.12,69,17,337/- u/s 35(2AB) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') being one and one-half times of the eligible expenditure of Rs. 8,46,11,558/- incurred on in-house Research and Development facility. 3. Facts of the case, in brief, are that the assessee is a Private Limited company engaged in the business of manufacture and sale of various engine components. It filed its return of income for the year under consideration on 12.02.2021 declaring taxable income of Rs. 40,53,11,570/- which was revised on 29.03.2021 declaring taxable income of Rs. 40,23,86,800/-. The case of the assessee was selected for complete scrutiny under CASS. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were....

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....refore, in the absence of form 3CL from the Secretary DSIR, the Assessing Officer disallowed the claim of deduction of Rs. 12,69,17,337/- u/s 35(2AB) of the income Tax Act, 1961 and added back the same to the total income. 5. In appeal the Ld. CIT(A) / NFAC sustained the disallowance of Rs. 12,69,17,337/- made by the Assessing Officer by observing as under: 1. Ground no.1 to 3 objects to disallowance of deduction claimed u/s. 35(2AB) for not fulfilling all the conditions prescribed under section 35(2AB). It was noticed from the records available that the assessee has claimed deduction of Rs. 126917337/- u/s 35(2AB) for in house research and development work in their in house research facility. The assessee company has claimed to....

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.... CIT(A) / NFAC by observing as under: "2. Ground 4 & 5 objects to not allowing deduction u/s.35(1)(iv) and 35(1)(i). After giving due consideration to the assessee's submissions as above and the oral submissions made through Video conference on 19.09.2022 the claim of the assessee of deduction of Rs. 12,69,17,337/- u/s.35(2AB) of the Act, is disallowed. The assessee has requested to allow Rs. 5,34,83,768/- u/s.35(1)(i) as revenue expenditure on research and development and Rs. 3,11,27,790/- u/s 35(1)(iv) as expenditure in nature of capital expenditure is considered and cannot be accepted since, the assessee has not claimed these originally. The assessee has claimed deduction u/s.35(2AB) without obtaining certificate in form 3CL....