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2012 (6) TMI 471 - AT - Income TaxWhether CIT(A) erred in deleting the addition made by the AO on account of dis-allowance of expenditure on R&D being capital in nature - expenses relating to material/consumable/spares - details of material used for lab trials for process development – Held that:- All these items are in the nature of material/consumables in the process of R&D. It is not the case of the AO that the said material was not consumed in the R&D process and some part thereof was remaining in the closing stock. Therefore, this expenditure incurred on material used for lab trials cannot in any manner be considered as expenditure being in the nature of capital. no infirmity in the order of CIT(A) vide which the assessee has been held eligible for deduction of these expenditure under both the sections either u/s 35(1)(i) or u/s 37(1) of the Act. ground of the revenue is dismissed Whether CIT(A) erred in directing the AO to allow the deduction u/s 80IB of the I. T. Act, 1961 if it is otherwise allowable without appreciating the fact that the assessee has not made any such claim in its return of income – Held that:- claim was not made by the assessee in the return of income, it was also not made during the course of assessment proceedings. The facts relating to that deduction have also not been shown to be existing on record. Ld. CIT(A) without considering this aspect has directed the AO to examine the claim of the assessee in accordance with law. When the facts regarding such deduction were not available on record and the ground was also not arising out of assessment order, CIT (A) has committed an error in entertaining such ground. ground of the revenue is allowed. appeal filed by the revenue is partly allowed
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