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2023 (3) TMI 916 - AT - Income Tax


Issues involved:
1. Allowance of further deduction u/s 80IA(4)(iv) of the Income-tax Act, 1961.
2. Granting of further deduction u/s 35(2AB).

Issue 1: Allowance of further deduction u/s 80IA(4)(iv) of the Income-tax Act, 1961:

The appeal by the Revenue challenges the order allowing a further deduction u/s 80IA(4)(iv) for Rs. 95,42,473. The assessee, engaged in manufacturing Power Driven Pumps, Valves, Hydro Turbines, and project execution & services, initially claimed deduction of Rs. 3,61,70,943 under section 80IA(4)(iv). During assessment proceedings, a revised claim of Rs. 4,57,13,416 was made, which included adding back depreciation under the Companies Act and reducing depreciation under the Income-tax Act, resulting in an increased eligible profit and deduction. The CIT(A) accepted this claim, leading to the Revenue's appeal. The Tribunal noted that the dispute was on quantification, as the eligibility conditions were met. However, the CIT(A) allowed the claim without verifying the depreciation figures under both Acts. The Tribunal remitted the matter to the AO for verification, emphasizing the need for correctness before final acceptance.

Issue 2: Granting of further deduction u/s 35(2AB):

The second issue pertains to granting a further deduction u/s 35(2AB) for Rs. 7,00,38,178. The assessee initially claimed Rs. 5,07,22,898 under this section but later claimed the additional amount after receiving approval post filing the return. The CIT(A) allowed this deduction after examining the necessary documents and certificates from the Government of India. Section 35(2AB) provides for weighted deduction on qualifying R&D expenditure in an approved in-house research unit. The approval for two units, Dewas and Baner, was received after filing the return, as evidenced by certificates from the Government of India. The Tribunal upheld the CIT(A)'s decision, as the further claim was based on verifiable amounts sanctioned by the Government, ensuring no interference was warranted.

Conclusion:
The Tribunal partly allowed the appeal for statistical purposes, remitting the first issue back to the AO for verification while upholding the CIT(A)'s decision on the second issue.

 

 

 

 

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