TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1047
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....er claiming deduction u/s 80IC of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') at Rs. 7,82,78,837/-. The return was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the assessee filed the requisite details. The Assessing Officer completed the assessment u/s 143(3) of the Act on 04.03.2014 assessing the total income at Rs. 22,23,65,380/-. 3. Subsequently, the Assessing Officer reopened the assessment as per the provisions of section 147 of the Act on the ground that the assessee has wrongly claimed the deduction of Rs. 3,58,47,391/- u/s 35(2AB) which has escaped assessment. The Assessing Officer thereafter issued notice u/s 148 of the I.T. Act, 1961. 4. The assessee objected to the reasons recorded by the Assessing Officer which were not accepted by him and he passed an order disposing off the objections to notice u/s 148 of the Act on 29.10.2018. Subsequently, the Assessing Officer issued notices u/s 143(2) and 142(1) of the Act asking the assessee to explain the deduction claimed in the return u/s 35(2AB). Reje....
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.... 35(2AB) of the Act was made and all the relevant documents were also submitted to the DSIR which had not issued a letter to the assessee company. Further, the assessee has received Form No.3CM for the period from 01.04.2006 to 31.03.2009 and also for the period from 01.04.2015 to 31.03.2017. The assessee has been doing the same activity consistently year on year without discontinuation, therefore, DSIR has no reason for not issuing Form 3CM for the period under consideration. Since it was a procedural lapse on the part of DSIR and since From No.3CM was processed by DSIR as per the information obtained under the Right to Information Act, it was argued that the deduction claimed u/s 35(2AB) of the Act should be allowed to the assessee. 7. Based on the arguments advanced by the assessee, the Ld. CIT(A) / NFAC directed the Assessing Officer to allow the weighted deduction u/s 35(2AB) of the Act by observing as under: "5. Decisions I have carefully gone through the facts of the case, assessment order, grounds of appeal and submission made by the Appellant. I find that the Appellant is aggrieved with the disallowance of weighted deduction Rs. 2,63,91,741/- u/s 35(2A....
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....e appellant has submitted all the documents to DSIR for getting the form however due to procedural lapse it was not issued within time by DSIR. Further, as per response received under Right to Information Act from DSIR, it is clear that form 3CM & Form 3CL was issued to the Appellant Company however the physical copy of the form is not available with DSIR. The appellant's jurisdiction ITAT in the case of Strides Arcolab Limited vs The Deputy Commissioner of Income Tax, Circle 15(3)(2), Mumbai (ITA 1903/Mum/2015) has held that "Therefore prior to 1.7.2016 there was no legal sanctity for Form No.3CL in the context of allowing deduction u/s 35(2AB) of the Act. This view has been held by the various judicial pronouncements as relied......." There are similar views has been held by the various judicial pronouncement. It is noted that AO has the information which was sought from DSIR that no approval was given to appellant accordingly, the deduction was denied. However the appellant has the evidence of the response from DSIR where it was accepted by DSIR that form 3CM was issued. Respectfully following the order of ITAT, Mumbai I hold that form 3CM....
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....as deduction u/s.35(2AB). 2. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in holding that Form 3CM and Form 3CL was issued by DSIR, for the year under consideration. Whereas, the DSIR, vide its letter dated 24.01.2018 has categorically informed the department that M/s. High Technology Transmission System India Pvt Ltd was not issued report in Form 3CL because their R&D unit located at K-226/1, MIDC Industrial area, Waluj, Aurangabad was not approved u/s.35(2AB) for the F.Y.2010- 11 to F.Y.2013-14. 3. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in admitting the additional evidence of the assessee during appellate proceedings, without giving Assessing officer an opportunity of examining/cross examining of the additional evidence. 4. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in quashing the entire assessment order treating the same against non-existing entity without considering the facts that in the assessment order passed u/s.143(3) r.w.s.147 of the Act, both the names were mentioned as "M/s. High Technology Transmission System India ....
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.... of merger along with the copy of the order of Hon'ble High Court. Therefore, issue of notice u/s 148 of the Act on 16.02.2018 in the name of a non existing entity is bad in law. For the above proposition, he relied on the decision of Hon'ble Bombay High Court in the case of City Corporation Ltd. vs. ACIT reported in 171 taxmann.com 301 (Bom). He submitted that in this case also the Assessing Officer had issued notice u/s 148 in the name of Amanora Future Towers Pvt. Ltd. which had merged with City Corporation Ltd. The Hon'ble Bombay High Court has held that the notice issued u/s 148 in the name of a non existing entity is bad in law. 12. The Ld. Counsel for the assessee submitted that the Assessing Officer passed the order u/s 147 of the Act wherein he has mentioned under the name column "High Technology Transmissions Systems India Pvt. Ltd. (now merged with Endurance Technologies Ltd.)". However, the PAN mentioned by the Assessing Officer in the assessment order is AABCH1184Q which belongs to High Technologies Transmissions Systems India Pvt. Ltd. He submitted that the Assessing Officer should have mentioned PAN of Endurance Technologies Pvt. Ltd. Since the PAN of High Tec....
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....the intervening period and there is no order of DSIR rejecting the application filed by the assesse, therefore, the claim of deduction u/s 35(2AB) cannot be denied. For the above proposition, he relied on the following decisions: a. Minilec India Pvt. Ltd. [93 taxmann.com 213 (Pune)] b. Advance Enzyne Technologies Pvt. Ltd. [116 taxmann.com 498 (Mum)] C. Meco Instruments Pvt. Ltd. [7 taxmann.com 24 (Mum)] d. Nath Bio Genes India Ltd. [ITA No. 367-417/PN/12] 16. He submitted that the approval issued by DSIR for the period 01.04.2006 to 31.03.2009 was approved by DSIR for the first time which was in Form 3CM. In the said form issued by DSIR, it is stated that the facility is approved from 01.04.2006 to 31.03.2009. Referring to Form 3CM as per the Income Tax Rules, he submitted that the period of validity prescribed by DSIR in its approval dated 11.03.2008 was not a condition stipulated in Form 3CM which was prescribed by CBDT. The date and validity of recognition to be granted by DSIR was introduced in Form 3CM w.e.f. 01.07.2016. Accordingly, till that time, DSIR had no authority to prescribe the period of validity in Form 3CM. He accordingly su....
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....nnot be followed the same being per incuriam. Further, in para 13 of the order in the case of ACIT vs. Ajeet Seeds Ltd. (supra), the Tribunal has discussed regarding the decisions in the case of Meco Instruments Pvt. Ltd. reported in 7 taxmann.com 24 (Mum) and Advance Enzyme Technologies Pvt. Ltd. reported in 116 taxmann.com 498. It has been held by the Tribunal that these decisions are not applicable since in those cases admittedly the requisite approval in Form 3CM was obtained by the assessees for the relevant assessment year. The Ld. Counsel for the assessee submitted that the above factual assertion in para 13 of the order is also not correct. 19. Referring to the decision in the case of Meco Instruments Pvt. Ltd. (supra) he submitted that in that case the concerned assessment year was 2005-06. Referring to para 6.1 of the said order he submitted that the Tribunal has clearly held that no approval was issued for the relevant assessment year. He drew the attention of the Bench to para 6.1 of the said order which reads as under: "6.1 In the backdrop of these facts, the issue before us is whether non- availability of the approval in the prescribed form for the relevan....
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....l as Ld. CIT(A) were in correct in denied the benefit of weighted deduction claimed u/s 35(2AB) of the Hence, we direct the AO to allow weighted deduction claimed u/s 35(2AB) of the Act." 21. He accordingly submitted that although in both the above referred cases of the Mumbai Bench of the Tribunal the approval in Form 3CM was not granted for the concerned assessment year, still the Tribunal in those cases held that the deduction u/s 35(2AB) was allowable. However, the Tribunal in the case of ACIT vs. Ajeet Seeds Ltd. (supra) has mentioned that these decisions are not applicable since in those cases the approval in Form 3CM was granted for the relevant assessment year. Thus, reasonings given by the Tribunal in the case of ACIT vs. Ajeet Seeds Ltd. (supra) is totally incorrect and therefore, on this ground also the decision cannot be followed. The Ld. Counsel for the assessee reiterated that the decision in the case of ACIT vs. Ajeet Seeds Ltd. (supra) is per incuriam and is not applicable to the facts of the present case. 22. The Ld. Counsel for the assessee referring to the decision of Hon'ble Andhra Pradesh High Court in the case of B.R. Constructions reported in 202 ITR 22....
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.... obtained Form 3CL from the prescribed authority for which it is not ascertainable as to what amount was actually incurred towards R&D activities, rejected the claim of deduction u/s 35(2AB) of the Act amounting to Rs. 2,63,91,741/-. We find before the Ld. CIT(A) / NFAC the assessee, apart from challenging the addition on merit, challenged the validity of the assessment on the ground that the same has been passed on a non existing entity. We find the Ld. CIT(A) / NFAC not only directed the Assessing Officer to delete the addition on merit but also held that the assessment order, which has been passed on a non existing entity, is null and void. While holding so, he relied on the decision of Hon'ble Supreme Court in the case of Maruti Suzuki Ltd. (supra). The reasonings given by the Ld. CIT(A) / NFAC while allowing the claim of deduction on merit has already been reproduced in the preceding paragraphs. 25. We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. Admittedly the erstwhile company High Technology Transmission System India Pvt. Ltd., in whose name the orders have been passed, has merged with Endurance Technologies Limited w.e.f. 01.04.2013 pur....
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....: "21. The averments in the above paragraphs support the Petitioner's case. In paragraph 4.3, there is a clear admission that the amalgamation of the company was brought to the notice of the Department. The only explanation is that " notice was issued on the non-existing company due to technical glitch in the system wherein no field in the notice u/s 148 of the Act is editable." 22. In paragraph 4.2, the approval obtained from the Principal Commissioner for the issue of impugned notices is emphasised. The affidavit states that files were moved proposing notices in the names of both entities, AFTPL and the Petitioner (CCL). There was a reference to seizure proceedings, the two PAN numbers, and the lack of an editable field on this notice. Therefore, it was submitted that the notice was generated on AFTPL's PAN. 23. In short, the averments in paragraphs 4.2 and 4.3 of the affidavit purport to apportion the blame on the department's utility system. Based upon this, the fundamental error is sought to be passed off as a mere technical glitch. Finally, the concluding sentence of paragraph 4.2 of the affidavit urges this Court: "Thus, Hon....
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....the Gujarat High Court in Anokhi Realty (P) Ltd. Vs. Income-tax Officer 5. In Adani Wilmar Ltd. Vs. Assistant Commissioner of Income-tax 6, another Division Bench of the Gujarat High Court rejected the Revenue's argument based on lack of inter-departmental coordination or non-application of mind when materials relating to amalgamation were already available with the department. The Court held that based upon such grounds, notices could not have been issued to a non-existent company. 28. The Delhi High Court, in the case of Principal Commissioner of Income Tax - 7, Delhi Vs. Vedanta Limited 7 rejected a contention very similar to that raised by Mr Suresh Kumar, relying on Skylight Hospitality LLP (supra). The Delhi High Court noted that the decision of the Supreme Court in Maruti Suzuki (supra), while enunciating the legal position concerning an order being framed in the name of a non- existent entity, had unequivocally held as being a fatal flaw which could neither be corrected nor rectified. It had held explicitly that such an order cannot be salvaged by taking recourse to Section 292B of the IT Act. The Court also noticed the peculiar facts obtained in Skylight Hospi....
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....he said order reads as under: 33. Similarly, the said unit has been approved by DSIR for the purposes of weighted deduction u/s 35(2AB) for the period 01.04.2015 to 31.03.2017, copy of which is placed at pages 31-32 of the Paper Book. We find for the period 01.04.2009 to 31.03.2012, the said unit was recognized as a R & D unit by DSIR and the copy of the recognition dated 09.04.2009 is placed at pages 40-41 of the Paper Book. Similarly the recognition issued by DSIR for the period from 01.04.2012 to 31.03.2015 vide letter dated 18.07.2012 is placed at pages 42-43 of the Paper Book. We further find from pages 33 to 39 of the Paper Book that the assessee had also applied for approval in Form 3CK. 34. So far as the period between 01.04.2009 to 31.03.2015 is concerned, there is no dispute to the fact that the assessee had made an application under Form 3CK which has not been rejected by DSIR. Further DSIR had granted recognition to the said unit for period from 01.04.2009 to 31.03.2012 and for the period from 01.04.2012 to 31.03.2015. Therefore, when the approval has been granted for the earlier period as well as the subsequent period, we find merit in the argument of the Ld. Cou....
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....ion in the initial period and thereafter, it is case of renewal of recognition of in-house R&D facility, which was also granted by the prescribed authority for the period ending 31.03.2012 and also for the period ending 31.03.2015. The correspondence between the assessee and DSIR for the third phase reflects a reminder being sent by DSIR to renew the recognition of in- house R&D facility beyond 31.03.2012. In other words, DSIR had not de- recognized the facility for the years 2009-12. The recognition to the facility has been granted from start till date and has not been withdrawn. In other words, recognition given by the prescribed authority which is mandate of section 35(2AB) of the Act is maintained and once the recognition is so maintained, the assessee has to be accorded deduction under section 35(2AB) of the Act. The non receipt of form No.3CM for the intervening three years is at best a procedural lapse and is not fatal for denial of claim of deduction under section 35(2AB) of the Act. Accordingly, we hold so. The prescribed authority in any case under the pre- amended provisions had no authority to look into the nature and quantum of expenditure except in the first year to s....
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.... submitted that facts of the present case are entirely similar to facts considered by the Tribunal and hence the assessee case is covered squarely by the decision of ITAT Mumbai, in the case of PCP Chemicals Pvt Ltd., Vs. ITO. We find that although the Tribunal has distinguished the decision of Hon'ble Gujarat High Court in the case of Claris LifeScience Ltd., Vs. CIT and Hon'ble Delhi High Court in the case of Maruthi Suzuki India Ltd. vs. Union of India, but fact remains that in the case of PCP Chemical Pvt Ltd., Vs. ITO (supra) the assessee has filed an application for recognition / approval on 12.08.2011 and in form No. 3CK and the competent authority has approved the facility for the period from 01.04.2011 to 31.03.2013. The assessee has claimed deduction for the A.Y 2011-12 for which neither recognition nor approval from the competent authority was received by the assessee. Under those facts, the Tribunal came to the conclusion that when the initial approval / recognition was granted with effect from 01.04.2011 on the basis of application filed by the assessee on 12.08.2011 then the deduction for expenditure incurred for the previous period i.e before the facility was approve....
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....14, and such approval was once again renewed up to 31.03.2019. From the above, it is very clear that the assessee facility was approved by the competent authority i.e the Secretary DSIR, but there was no approval in form No. 3CM for the impugned Assessment year. Therefore, we are of the considered view that from the settled legal position of the law by the various cases of High Courts as discussed here in above in preceding paragraphs what is relevant to decide eligibility for weighted deduction u/s 35(2AB) of the Act, is existence of R&D facility and recognition of such facility by the competent authority. Once the facility has been approved by the competent authority, then there is no cut off date is prescribed for approval of such facility and the benefit of deduction u/s 35(2AB) of the Act, should be given to the assessee as long as the recognition is in force. Hence, we are of the considered view that the A.O as well as Ld. CIT(A) were in correct in denied the benefit of weighted deduction claimed u/s 35(2AB) of the. Hence, we direct the A.O to allow weighted deduction claimed u/s 35(2AB) of the Act. 18. In the result, appeal filed by the assessee is allowed." 38. ....
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....tment of Scientific and Industrial Research. The sub-Rule (4) requires the company to furnish the application in Form No.3CK. As per sub-Rule (5A), if the prescribed authority is satisfied that the conditions provided in this rule and in sub-section (2AB) of section 35 of the Act are fulfilled, then pass an order in writing in Form No. 3CM. However, as per the proviso to sub-rule (5A), if the prescribed authority is not so satisfied it is to grant reasonable opportunity to the assessee company before rejecting its application. Sub-Rule (7A) prescribes the certain conditions subject to which approval is to be granted. A close reading of the section r.w. Rule 6 would reveal that nowhere any time has been prescribed within which the application is required to be filed by the assessee company. Further, nowhere, any condition has been prescribed regarding cut off date from which the approval could be made effective. Therefore, once the assessee company is granted approval it will apply till it is revoked with reference to all the assessment years, which come within the ambit of that period. Therefore, mere mentioning of 1.4.2007 in the order dated 28.8.2008 was of no consequence and the....
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....ined and processes developed, new products introduced, awards and prizes received and other achievements. Further, as per clause 8, commercial exploitation of the know-how/process developed by in-house R&D Unit was to be solely governed by the licensing policies in operation from time to time and the decision of the licensing authorities in this regard is considered to be final. Thus, stringent conditions have been imposed by the prescribed authority itself though the said approval was not meant for tax exemption but in substance, there was not much difference between the objects sought to be achieved by these approvals. 6.4 Further, in any view of the matter, at best it could be said that it was only a procedural defect and from the various decisions, noted in the arguments of ld Counsel for the assessee, it is clear that merely on the ground of technicalities of procedure, the benefit bestowed by legislature cannot be denied. When it comes to follow the prescribed procedure, the exemption provisions have to be liberally construed and if in substance, the assessee has fulfilled the basic requirements then the exemption cannot be denied. 6.5 We find that similar v....
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....he facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in holding that Form 3CM and Form 3CL was issued by DSIR, for the year under consideration. Whereas, the DSIR, vide its letter dated 24.01.2018 has categorically informed the department that M/s. High Technology Transmission System India Pvt Ltd was not issued report in Form 3CL because their R&D unit located at K-226/1, MIDC Industrial area, Waluj, Aurangabad was not approved u/s.35(2AB) for the F.Y.2010- 11 to F.Y.2013-14. 3. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in admitting the additional evidence of the assessee during appellate proceedings, without giving Assessing officer an opportunity of examining/cross examining of the additional evidence. 4. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in quashing the entire assessment order treating the same against non-existing entity without considering the facts that in the assessment order passed u/s.143(3) r.w.s.147 of the Act, both the names were mentioned as "M/s. High Technology Transmission System India Pvt. Ltd (Now merged with Endurance Techno....
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....nd that of the CIT(A), NFAC, Delhi be vacated. 7. The appellant craves leave to add, amend or alter ail or any of the grounds of appeal. 43. After hearing both sides, we find the grounds raised by the Revenue in ITA No.1659/PUN/2024 for assessment year 2012-13 and ITA No.1683/PUN/2024 for assessment year 2013-14 are identical to the grounds raised by the Revenue in ITA No.1657/PUN/2024 for assessment year 2011-12. We have already decided the issues and dismissed the appeal of the Revenue. Following similar reasonings, we dismiss the grounds raised by the Revenue in ITA No.1659/PUN/2024 for assessment year 2012-13 and ITA No.1683/PUN/2024 for assessment year 2013-14. The above 2 appeals filed by the Revenue are accordingly dismissed. ITA No.1660/PUN/2024 (A.Y.2014-15) 44. Facts of the case, in brief, are that the assessee filed its original return of income declaring total income of Rs. 155,40,57,180/-. The Assessing Officer completed the assessment u/s 143(3) on 28.12.2016 determining the taxable income at Rs. 155,66,27,455/-. Subsequently the PCIT set aside the order u/s 263 of the I.T. Act to the file of the Assessing Officer. During the proceedings subsequent t....
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.... activity For computation of business income under section 35 of the Act, expenditure on scientific research is to be allowed on fulfillment of certain conditions which are enlisted in the said section Under various sub-sections of section 35 of the Act, the conditions and the allowability of expenditure vary. Sub-section (1) to section 35 of the Act deals with expenditure on scientific research, not being in the nature of capital expenditure, is to be allowed to research association, university, college or other institution, for which an application in the prescribed form and manner is to be made to the Central Government for the purpose of grant of approval or continuation thereto. Before granting the approval, the prescribed authority has to satisfy itself about the genuineness of activities and make enquiries in this regard. Under sub-section (28) to section 35 of the Act, a company engaged in the specified business as laid there on, if it incurs expenditure on scientific research or in-house Research & Development facility also needs to be approved by the prescribed authority, is entitled to deduction, provided the same is approved by the prescribed authority. 39. Now....
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....port in relation to the approval of in- house R & D facility in form No. 3CL to the DG (Income-tax Exemption) within sixty days of its granting approval. Under clause (c), the company at the relevant time had to maintain separate accounts for each approved facility, which had to be audited annually. Clause (b) to sub-rule (7A) has been substituted by IT (Tenth Amendment) Rules, 2016 w.e.f. 01.07.2016, under which the prescribed authority has to furnish electronically its report (1) in relation to approval of in-house R&D facility in part A of form No.3CL and (ii) quantifying the expenditure incurred on in-house R & D facility by the company during the previous year and eligible for weighted deduction under sub-section 2AB of section 35 of the Act in part B of form No.3CL In other words the quantification of expenditure has been prescribed vide IT (Tenth Amendment) Rules, 2016 w.e.f. 01.07 2016. Prior to this amendment, no such power was with DSIR ie. after approval of facility. 41. Under the amended provisions, beside maintaining separate accounts of R & D facility, copy of audited accounts have to be submitted to the prescribed authority. These amendments to rules 6 and 7....
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....g of section itself, the assessee is entitled to weighted deduction on expenditure so incurred by the assessee for development of facility. The Tribunal has also considered r. 6(5A) and Form No 3CM and come to the conclusion that a plain and harmonious reading of Rule and Form clearly suggests that once facility is approved, the entire expenditure so incurred on development of R&D facility has to be allowed for weighted deduction as provided by s. 35(2AB). The Tribunal has also considered the legislative intention behind above enactment and observed that to boost up R&D facility in India, the legislature has provided this provision to encourage the development of the facility by providing deduction of weighted expenditure Since what is stated to be promoted was development of facility, intention of the legislature by making above amendment is very clear that the entire expenditure incurred by the assessee on development of facility, if approved, has to be allowed for the purpose of weighted deduction. 10. We are in full agreement with the reasoning given by the Tribunal and we are of the view that there is no scope for any other interpretation and since the approval is gra....
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.... the deduction under section 35(2AB) of the Act but the provisions of the Act do not prescribe any methodology of approval to be granted by the prescribed authority vis-à-vis expenditure from year to year. The amendment brought in by the IT (Tenth Amendment) Rules w.e.f. 01.07.2016, wherein separate part has been inserted for certifying the amount of expenditure from year to year and the amended form No. 3CL thus, lays down the procedure to be followed by the prescribed authority. Prior to the aforesaid amendment in 2016, no such procedure / methodology was prescribed. In the absence of the same, there is no merit in the order of Assessing Officer in curtailing the expenditure and consequent weighted deduction claim under section 35(2AB) of the Act on the surmise that prescribed authority has only approved part of expenditure in form No 30 We find no merit in the said order of authorities below. 46. The Courts have held that for deduction under section 35(2AB) of the Act, first step was the recognition of facility by the prescribed authority and entering an agreement between the facility and the prescribed authority. Once such an agreement has been executed, under w....
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....or alter all or any of the grounds of appeal. 48. The Ld. DR submitted that the DSIR has issued Form No.3CL vide letter dated 20th January, 2017 and thereby quantified total expenditure (Revenue and Capital) at Rs. 2167.66 lacs for weighted deduction. Later, the DSIR had passed corrigendum letter on 16th of August, 2017 wherein quantified amount of expenditure (Revenue and Capital) was revised as Rs. 2237.98 lakhs for weighted deduction for the AY 2014-15 i.e. Rs. 16,13,70,000/- as Revenue expenditure + Rs. 6,24,28,000/- as Capital expenditure. The revised allowable deduction as per DSIR revised corrigendum letter dated 16.08.2017 was rightly allowed to the assessee company. Considering the above facts, the assessee is eligible for weighted deduction u/s 35(2AB) on the quantifying expenditure to the extent of expenditure certified by DSIR vide its revised corrigendum letter on 16th of August, 2017. DSIR is the competent authority which has confirmed the expenditure Incurred by the assessee company during the year under consideration after examining the details of the expenses furnished by the assessee. The assessee's claim that DSIR confirmation on generation and issuance of....
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.....35(2AB) of the Act @200% to the extent of Rs. 47,53,74,120/- in respect of 4 R&D units. However, the DSIR had issued Form No.3CL only in respect of 3 R&D units only and Form No.3CL was not issued in respect of the 4th R&D unit located at K-226/1, MIDC, Industrial Area, Waluj, Aurangabad. In this regard, the DSIR vide its letter had clarified and intimated that Form No.3CL in respect of forth unit was not approved u/s.35(2AB) during the F.Y.2014-15 and the same was later approved w.e.f. 01.04.2015 to 31.03.2017. Accordingly, the deduction claimed u/s 35(2AB) at Rs. 5,74,79,168/- was disallowed. 53. In appeal, the Ld. CIT(A) / NFAC deleted the addition made by the Assessing Officer. 54. Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds: 1. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in deleting the addition of Rs. 7,41,90,002/- claimed as deduction u/s.35(2AB) of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in allowing the excess claim of deduction at Rs. 1,67,10,834/- without c....
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....venue in ITA No.1657/PUN/2024. Following similar reasonings, we dismiss the grounds raised by the Revenue. ITA No.1661/PUN/2024 (A.Y. 2016-17) 59. Facts of the case, in brief, are that the assessee filed the return of income for the impugned assessment year on 30.11.2016 declaring total income of Rs. 206,24,22,180/-. The Assessing Officer completed the assessment u/s 143(3) on 30.12.2018 determining the total income of the assessee at Rs. 263,18,34,695/- by disallowing the claim of deduction u/s 35(2AB) of the Act of Rs. 56,49,66,955/- on account of absence of report in Form 3CL from the prescribed authority. Similarly, he made addition of Rs. 30 lakhs on the ground that the assessee company, during the impugned assessment year, has received an amount of Rs. 30 lakhs from the Directorate of Industries, Uttarakhand as incentive / subsidy which is related to the unit at Pantnagar, Uttaranchal for which the assessee claimed deduction u/s 80-IC of the Act. Since the assessee has revised the claim of deduction u/s 80-IC outside the return of income, therefore, the deduction @ 30% of the same i.e. subsidy amount is not allowable. The explanation of the assessee that the amount of R....
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....n the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in deleting the addition of Rs. 30,00,000/- received as subsidy, without appreciating the fact that the same was claimed u/s.80IC of the I.T. Act, during assessment proceeding and without revising its return of income and in contravention of decision of Apex Court in the case of Goetze (India) Ltd. Vs. CIT(2006) CTR (SC) 182: (2006) 284 ITR 323 (SC). 5. The order of the Assessing Officer may be restored and that of the CIT(A), NFAC, Delhi be vacated. 6. The appellant craves leave to add, amend or alter all or any of the grounds of appeal. 62. Grounds of appeal No.1 and 2 relate to the order of the Ld. CIT(A) / NFAC in allowing the claim of deduction u/s 35(2AB) of the Act. 63. After hearing both sides, we find the Assessing Officer disallowed the claim of deduction u/s 35(2AB) on the ground that Form 3CM was not available and the assessee has not produced Form 3CL. We find before the Ld. CIT(A) / NFAC the assessee submitted that Form 3CL was issued by DSIR after completion of assessment. The Ld. CIT(A) / NFAC therefore, directed the Assessing Officer to examine the genuinenes....
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.... foreign payment without deduction of TDS Rs. 4,53,134/- iv) addition on account of deduction claimed u/s 35DDA Rs. 60,02,685/- 67. In appeal, the Ld. CIT(A) / NFAC deleted all the additions made by the Assessing Officer. 68. Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds: 1. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in deleting the addition of Rs. 91,50,000/- claimed by the assessee company under 80G of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in allowing the deduction of Rs. 91,50,000/- claimed by assessee on its CSR expenditure at Rs. 1,83,00,000/- without appreciating the fact that CSR expenditure is not an allowable as deduction as per the Explanation 2 to section 37 of Income Tax Act, 1961. 3. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in allowing the deduction of Rs. 91,50,000/- claimed by assessee on its CSR expenditure at Rs. 1,83,00,000/- without appreciating the fact that the motive of introduction ....
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....n 37 of the Act, CSR expenditure is not an allowable expenditure and cannot be allowed as deduction. He, therefore, disallowed the same and added to the total income of the assessee. 71. In appeal, the Ld. CIT(A) / NFAC allowed the claim of the assessee. While doing so he noted that a perusal of the provisions of Section 37(1) as well as Section 80G of the Income Tax Act, 1961 would show that there is no specific restriction for claiming the deduction u/s 80G of the Income Tax Act, 1961. Therefore, no disallowance of deduction claimed u/s 80G is warranted. While adjudicating the issue, he relied on the decision of the Bangalore Bench of the Tribunal in case of Goldman Sachs Services Pvt Ltd V JCIT IT(TP)A No 2355/Bang/2019. 72. Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal. 73. The Ld. DR submitted that the claim of the assessee made u/s.80G was rightly disallowed and added to the total income of the assessee by the Assessing Officer. He submitted that the CSR expenditure was brought in statute with the motive to share burden of the government in providing social services by companies. If CSR expenditure is allowed as tax ....
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.... that the CSR is a mandatory expenditure specified in Companies Act whereas deduction claimed u/s 80G of donation is voluntary in nature. The AO's contention is that the nature and character of CSR expenditure mandated u/s 135 of the Companies Act read with provision of Section 37 of the Income Tax Act, 1961 and donation prescribed in Section 80G are totally different, distinct and independent from each other. On the other hand, it has been found that the Appellant has disallowed the CSR expenses amounting to Rs. 1,83,00,000/- u/s 37(1) of the Income Tax Act, 1961 and claimed the deduction u/s 80G of Rs. 91,50,000/- for the year under consideration. On perusal of the provision of Section 37(1) as well as Section 80G of the Income Tax Act, 1961, the contention of the appellant is found to be correct as there is no specific restriction for claiming the deduction u/s 80G of the Income Tax Act 1961 and therefore, no disallowance of deduction claimed u/s 80G is warranted in this case. The appellant has relied upon the following judgements applicable to the facts of the case: * Goldman Sachs Services Pvt Ltd V JCIT IT(TP)A No 2355/Bang/2019. * Allegis Servi....
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....s of the contributions. Hence, on the facts of the case it is to be examined that the conditions are satisfying the requirements of claim u/s 80G of the Act. The appellant has also disallowed the CSR expenses amounting to Rs. 1,83,00,000/- u/s 37(1) of the Income Tax Act, 1961. Accordingly, the disallowance made by the A.O of Rs. 91,50,000/- is deleted. Accordingly, this Ground of Appeal is allowed." 76. We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. The Co-ordinate Bench of the Tribunal in the case of Advik Hi Tech Pvt. Ltd. vs. DCIT (supra) and DCIT vs. Credit Suisse Services (India) Pvt. Ltd. (supra) has decided an identical issue and has allowed the claim of deduction u/s 80G of the Act out of CSR expenses which was otherwise disallowed u/s 37(1) of the Act. Therefore, in absence of any contrary material brought to our notice by the Ld. DR, we do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. Grounds of appeal No.1 to 3 raised by the Revenue are accordingly dismissed. 77. Grounds of appeal No.4 and 5 relate to the order of the Ld. CIT(A) / NFAC in allowing the deduction u/s 35(2AB) of the Act amounti....
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....iew of the decision of Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT (2006) 204 CTR (SC) 182: (2006) 284 ITR 323 (SC) the assessee can make a claim for deduction, which has not been claimed in the return, only by filing a revised return within the time allowed. Therefore, the decision of the Ld. CIT(A) / NFAC be reversed. 85. The Ld. Counsel for the assessee on the other hand submitted that the amounts mentioned in grounds are not correct. He submitted that in the course of assessment proceedings the assessee has claimed the following expenses: Sr. No. Particulars Amount (Rs. ) 1 Deduction on account of education cess 2,23,84,684/- 2 ROC fee and stamp duty for bonus issue 84,98,300/- 3 Listing fees 55,27,300/- ----------- 3,64,10,284/- 86. He submitted that the Ld. CIT(A) / NFAC did not allow the claim of Education cess. So far as the other expenses are concerned, he submitted that these were not claimed in the return of income filed by the assessee. The AO relying on the decision of Hon'ble Supreme Court in the case of Goetz India Ltd. Vs. CIT (supra) held that the claim o....
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....f listing fee, ROC fee and stamp duty for bonus issue are concerned, he held the same to be revenue in nature by following the decisions in the cases of DCIT Vs Great Eastern Energy Corporation Ltd and Empower India Ltd vs DCIT (supra). We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. 90. So far as the order of the Ld. CIT(A) / NFAC in allowing the claim not made in the return of income or during the revised return of income is concerned, the Hon'ble Supreme Court in the case of Goetz India Ltd. Vs. CIT (supra) has held that the decision was limited to power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the Tribunal. We find the Hon'ble Madras High Court in the case of M/s. Abhinitha Foundation Pvt. Ltd. (supra), which has been reproduced by the Ld. CIT(A) / NFAC in the body of the order has held as under: "Decision I have carefully considered the facts of the case, and written submission of the appellant, discussion of the AO in the assessment order and material available on record. The appellant averred that the learned AO has inco....
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....as High Court in the case of M/s. Abhinitha Foundation Pvt. Ltd. (supra), we do not find any infirmity in the order of the Ld. CIT(A) / NFAC in entertaining the claim made by the assessee otherwise than by filing a revised return. 92. So far as the allowability of expenditure on account of ROC fee and stamp duty for bonus issue are concerned, we find the Mumbai Bench of the Tribunal in the case of ACIT vs. Neuzen Finance Pvt. Ltd. (supra) has held that the expenses incurred by the assessee company on filing fees for increase in authorized share capital to issue bonus shares was to be allowed as revenue expenditure. The relevant observations of the Tribunal read as under: "6. After hearing both the parties and on perusal of the relevant finding given in the impugned order as well as material placed on record, we find that assessee company has incurred ROC fees of Rs. 14,25,180/- towards increase in authorised share capital to issue bonus shares. The authorised capital was increased from Rs. 20 Crores in March 2019 to Rs. 40 Crores in March 2020. Consequently, share capital has been increased from Rs. 18.43 Crores to 36.88 Crores. The additional share capital was raised b....
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.... Tribunal, was relevant to the determination of the question that arose before them. We have no doubt that if this circular had been brought to the notice of the Tribunal, it would have directed the ITO to examine the question afresh and redetermine the same in the light of that circular. We are therefore, of the view that we should decline to answer the question referred to us." 94. In view of the above decisions, we hold that the Ld. CIT(A) / NFAC has rightly allowed the claim of ROC fee, stamp duty for bonus issue of shares and listing fee as an allowable expenditure. Accordingly, the ground of appeal No.6 raised by the Revenue is dismissed. 95. In the result, the appeal of the Revenue for assessment year 2017-18 is dismissed. ITA No.1663/PUN/2024 (A.Y. 2018-19) 96. Facts of the case, in brief, are that the assessee filed its return of income for the impugned assessment year on 31.10.2018 declaring total income of Rs. 3,67,79,13,200/-. The AO completed the assessment u/s 143(3) r.w.s. 144B of the Act on 23.04.2021 determining the total income of the assessee at Rs. 377,79,87,952/- by making the following additions: a) addition on account of deduction u/s 80G Rs....
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....issued by DSIR. 6. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in deleting the addition on account of duty drawback at Rs. 24,06,617/- without appreciating the fact that the assessee was following mercantile system of accounting, and it must not have reported the lessor income to the tune of Rs. 24,06,617/- accrued as duty drawback, when it was sanctioned by the respective authority. 7. On the facts and in the circumstances of the case, the CIT(A), NFAC, Delhi has erred in deleting the addition of Rs. 4,24,156/- made on account of excess deduction claimed by the assessee u/s.35(1)(iv) of the I.T. Act, 1961 without appreciating the fact that addition was made on failure on the part of assessee in submitting corroboratory evidence i.e. reconciliation of difference in invoices raised and claimed. 8. The order of the Assessing Officer may be restored and that of the CIT(A), NFAC, Delhi be vacated. 9. The appellant craves leave to add, amend or alter all or any of the grounds of appeal. 99. Grounds of appeal No.1 to3 raised by the Revenue relate to the order of the Ld. CIT(A) / NFAC in allowing the claim of ....
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....r in which the export sale is recognized. According to the Assessing Officer as per mercantile system the revenue is to be recognized as and when certainty arises regarding receipt of income. In this case the assessee had applied for duty drawback of Rs. 3,75,43,545/- during the year under consideration and the same was sanctioned by the respective authority, therefore the same should have been treated as income because in case of duty drawback certainty arises as soon as duty drawback is sanctioned by the authority. Therefore, in absence of any valid explanation regarding the treatment of Duty Drawback on cash basis instead of mercantile basis, the actual amount claimed during the year as duty drawback of Rs. 3,75,43,545 /- was treated as the correct income of the assessee from Duty drawback and difference amount of Rs. 24,06,617/- was added to the total income of the assessee as well as book profit of the assessee u/s 115JB of the Income Tax Act, 1961. 105. Before the Ld. CIT(A) / NFAC it was submitted that the assessee is following mercantile system of accounting where duty drawback is recognized on the basis of export recognized during the year. If the duty drawback received....
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....ccordance with law should be upheld. 111. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs. 24,07,617/- on the ground that the assessee has received duty drawback of Rs. 3,75,43,545/- but has offered income of Rs. 3,51,35,928/- only. We find the Ld. CIT(A) / NFAC deleted the addition on the ground that the assessee is consistently offering duty drawback income when the export is complete and consistently following the same method. We do not find any infirmity in the order of the Ld. CIT(A) / NFAC on this issue. The assessee has filed a reconciliation statement and proved that it is consistently offering the duty drawback income when the export is complete. In absence of any contrary material brought to our notice by the Ld. DR against the order of the Ld. CIT(A) / NFAC on this issue and following the rule of consistency, we do not find any infirmity in his order. Accordingly, the order of the Ld. CIT(A) / NFAC deleting the ....
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.... 115. Aggrieved with such order of the Ld. CIT(A) / NFAC, the Revenue is in appeal before the Tribunal. 116. The Ld. DR submitted that the Assessing Officer had rightly disallowed the excess deduction claimed u/s 35(1)(iv) of Rs. 4,24,156/- which is not in accordance with the provisions of section 35(1)(iv). Therefore, the decision of the Ld. CIT(A)/ NFAC is not acceptable. 117. The Ld. Counsel for the assessee while supporting the order of the Ld. CIT(A) / NFAC submitted that the assessee during the course of assessment proceedings had submitted all the details for which deduction was claimed. He submitted that the Assessing Officer alleged that the capitalized amount is higher than the invoice value and ignored the fact that the assessee capitalized the assets on the basis of put to use and claimed the deduction u/s 35(1)(iv) as per provisions of the Act. He further submitted that since the order of the Ld. CIT(A) / NFAC is in accordance with law, the same should be upheld and the grounds raised by the Revenue on this issue be dismissed. 118. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and t....
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....relating to HTTSIPL Will not be done arad return filings would be duly carried by ETPL 4) Post merger, the assessse Company vis. Endurance Technologies Private Limited (ETPL) accounts will include all transaction of HTTSIPL for the period from Apre 1. 2013 to February 09, 2034 8 there will be only one final accounts of Endurance Technologies Private Limited for F.Y. 20013-34. 5) Further for administrative and procedurat compliances and convenience PAN ang TAN If HTTSIPL would be surrendered in due course of time after completion of formalities related to fling of TOS returns and scrutiny 6) In ense, any further formality is to be complied in this respect we shall be pleased to do so. on hearing from your honour. Kindly Acknowledge For Endurance Technologies Private Limited - Authorised Signatury End. : A copy of the Order of Bemtiay High Court & copy for filing with ROC. -- 03/2/14 Document 2 Phone: + 91-240-2549300. 2556684. 2556482 Ten +11-240-2556485 . . ENDURANCE ENDURANCE TECHNOLOGIES PVT LTD. [formerly Endurance Tuchoologies bid.] E-228/221, M.L.D.C. labuthial Niet February 24. 2014 The Assistant Commissioner of Income tax C....
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.....5.65 1. Name and address of the assessco M/s. High Technology Transmission Systems India Pvt. Ltd., K-228, MIDC Industrial Area. Waluj, Aurangabad. 2 PAN/GIR No. AABCH1184Q 3. District / Ward / Circle ACIT. Circle-1, Aurangabad. 4 Status Company. Assessment year 53/16 2011-12. 2013-14 6 Previous Year 2010-11. 7. Date(s) of hearing - As per order sheet. 8 Date of order 04/03/2014. 9 Section & sub- section under which the assessment is made 143(3) of the Income Tax Act, 1961." 53/16 2011-12. 2013-14 ASSESSMENT ORDER The assessee company is engaged in the business of manufacturing automobile parts. In this case, the assessee has filed its return of income electronically on 30/09/2011, declaring a total income of Rs.22,23,65,379/- after claiming deduction u/s.80C of the I.T.Act at Rs.7,82,78,837/-, The Return of Income was processed u/s.143 (1) of the Income Tax Act, 1961. 2. Subsequently, the case was selected for scrutiny under CASS and a notice u/s.143(2) of the I.T.Act, 1961, was issued on 07/09/2012, by my predecessor. Due to change of incumbent, a fresh notice u/s.142(1) of the Act has been issued on 11/07/2013 and served on th....