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2006 (12) TMI 445 - AT - Income TaxUnexplained cash credit u/s 68 - deposits obtained by the company from its employees/depositors - Genuineness of transactions and creditworthiness of the depositors - HELD THAT:- In our view, having not disputed the facts that these persons were ex-employees of the assessee and drawing salaries it has to be implied that depositors possessed creditworthiness to make these deposits. It shall be pertinent here to mention that degree of proof cast on the assessee to prove creditworthiness is not of infallible nature, what is contemplated is that the assessee should be able to prima facie show that depositors had reasonable capacity. In the peculiar facts and circumstances of the given case, we are of the view that the Assessing Officer has rigidly stuck to the issue of confirmations to overshadow all other material available on record which has not been considered at all. The assessee had furnished before the Assessing Officer whatever evidence was available with it, which in our opinion was sufficient to reasonably discharge primary onus cast on the assessee in terms of section 68. It was for the Assessing Officer to rebut the same on the basis of available record, instead the Assessing Officer had merely picked up non-filing of confirmations as a tool to discard other material and explanations of the assessee. Rejection of the explanations of the assessee is not based on objective considerations but by way of summary rejection. In our view, the assessee having given reasonable and plausible explanations, which have not been found to be wrong or unsatisfactory on any objective consideration, we hold that cash credit in question cannot be added as unexplained cash credit u/s 68 of the Act. Accordingly, this ground of the assessee is allowed. Deduction of expenses on research and development u/s 35(2AB) - HELD THAT:- A plain reading of Section 35(2AB) clearly manifests that the assessee has to develop facility which presupposes incurring expenditure in this behalf, application to the prescribed authority, who after following proper procedure will approve the facility or otherwise and the assessee will be entitled to weighted deduction of any and all expenditure so incurred. These words refer back to the facility which is so developed. Consequently, a plain reading clearly indicates that the assessee is entitled to weighted deduction on expenditure so incurred by the assessee for development of facility. A plain and harmonious reading of provision, rule and form clearly suggests that once facility is approved, entire expenditure so incurred on development of “R & D” facility has to be allowed for weighted deduction as provided by section 35(2AB). In our considered view, a plain and simple reading is enough to give meaning of provision. An interpretation is to be applied when there is an ambiguity in the meaning of provisions. In our view there is no such ambiguity here. Even if we assume that there is any slight doubt in the meaning/language of provision, we have to refer to legislative intent. To boost up “R & D” facility in India, the Legislature 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 the 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. In our view, legislative intention for bringing the amendment also justifies plain and simple meaning of the section. Thus, we hold that the assessee is entitled to weighted deduction in respect of entire expenditure incurred for development of in-house “R & D” facility in terms of section 35(2AB) and claim of the assessee shall be allowed. This ground of the assessee is allowed. In the result, the assessee’s appeal is partly allowed for statistical purpose.
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