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2018 (3) TMI 582 - AT - Income TaxDisallowance of claim of deduction u/s.35(2AB) - articles manufactured by the assessee which are machines used in Railway Stations - eligibility only to electronic items - Held that:- Neither the A.0. nor the board was competent to take any decision of any such controversy relating to report and approval granted by the prescribed authority as it involved expert view or opinion. It was prescribed authority alone which would be competent to take decision with regard to the correctness or otherwise and its order of approval granted in form No. 3CL as prescribed u/s. 35('2AB) read with rule 7A of the Income Tax Rules, 1962. In the present case on hand, on perusal of the facts available on record, we find that the A.0. Without following the procedure laid down under rules, simply disallowed the expenditure claimed by the assessee by holding that the goods manufactured by the assessee are mere office machines and apparatus listed in Eleventh Schedule. A.0. is not correct in disallowing the claim made by the assessee u/s. 35(2AB) of the Act. - Decided in favour of assessee. Allowability of capital expenditure incurred as research development - Held that:- As per Form No.3CL, the expenditure was R&D only. The evidence brought on record shows that the expenditure was capital expenditure other than land and building. A.O. disallowed the same without examining the nature of expenditure. Therefore, we do not find any infirmity in the order of the Ld. CIT(A) and the same is upheld.
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