TaxTMI 
TaxTMI 
2026 (7) TMI 745
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....ed by the Commissioner of Income-tax (Appeals), Mumbai, has been rejected. The assessment year in question is assessment year 2012-13. 2. The only question of law as urged on behalf of the revenue in this appeal is as under: "Whether, on the facts and circumstances of the case in law, the ITAT justified in holding the research and development expenditure as allowable deduction under the provision of Section 80IB/IC of the Income-Tax Act, wherein profits and gains in multiple units are granted deduction from the total income and hence, no expenditure relevant to such units can be allowed as deduction?" 3. We have perused the record. Considering the facts and circumstances of the case as borne out by the record, we find that th....
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....said judgment reads thus:- "9. There is no dispute that the assessee is entitled to the benefits of the provisions of sections 80HH, 80-I and 80-IA. Section 80-I provides that where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, there shall be allowed, in computing the total income of the assessee, a deduction from such profits and gains an amount equal to twenty per cent. thereof. Section 80-IA provides that where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking, there shall be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount specified t....
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....refined, or cracked to produce the said products. This is not controverted. It seems to us to make no difference that the appellants buy the raw naphtha from others. The question is to be judged regardless of this, and the question is whether the intervention of the raw naphtha would justify the finding that the said products are not 'derived from refining of crude petroleum'. The refining of crude petroleum produces various products at different stages. Raw naphtha is one such stage. The further refining, or cracking, of raw naphtha results in the said products. The source of the said products is crude petroleum. The said products must, therefore, be held to have been derived from crude petroleum. We do not think that the source o....
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....n into consideration while computing the deduction under the said provisions. 14. .... 15. We are in respectful agreement with the judgment, the basis of which is that unless the expenditure incurred on the R & D work relates to the undertaking/unit in question, the same cannot be apportioned to it. 16. Mr. Suresh Kumar submitted that any research and development activity carried out by the head office would automatically enure to the benefit of the units/industrial undertakings. He submitted that the head office itself does not manufacture any medicines, the benefit of the research and development would be utilized for manufacturing the products and the products would obviously be manufactured by the units. ....
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....uristic research and the result of research is uncertain and none of the items on which research is being undertaken, were being manufactured by these undertakings. It was also the assessee's case that the R&D units were found in separate buildings, far away from its manufacturing units, and are "standalone" independent units. Also independent and separate financial statements are prepared and audited. Further all the data in regard to the detail tabulation showing year wise details of formulations developed by the R&D wing and status of such products were furnished before the Assessing Officer, to contend that it was clear that R&D expenditure was totally unrelateable to the manufacturing activities of the assessee. The CIT(A) accepted the....