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2018 (4) TMI 1058 - AT - Income TaxDisallowance of weighted deduction u/s 35(2AB) - non receipt of form No.3CM - expenditure incurred on Research & Development activity - where facility has been approved by prescribed authority, but no form No.3CM issued, can the assessee be denied deduction? - Held that:- Recognition given by the prescribed authority which is mandate of section 35(2AB) is maintained and once the recognition is so maintained, the assessee has to be accorded deduction under section 35(2AB) of the Act. The non receipt of form No.3CM for the intervening three years is at best a procedural lapse and is not fatal for denial of claim of deduction under section 35(2AB) of the Act. Accordingly, we hold so. The prescribed authority in any case under the pre-amended provisions had no authority to look into the nature and quantum of expenditure except in the first year to see investment in land and building. After recognition of facility and approval by DSIR, the Assessing Officer is to allow the claim of assessee after verifying the same. Thus allow deduction claimed under section 35(2AB) of the Act to the facility for the year under appeal. - Decided in favour of assessee Disallowance u/s 43B on delayed payment of leave encashment - Held that:- Clause (f) to section 43B of the Act was inserted by the Finance Act w.e.f. 01.04.2002. However, the Hon’ble High Court of Calcutta in Exide Industries Ltd. Vs. Union of India (2007 (6) TMI 175 - CALCUTTA High Court) had struck down the said amendment being arbitrary and unconstitutional, applying the ratio laid down by the Hon’ble Apex Court in the case of Bharat Earth Movers Vs. CIT (2000 (8) TMI 4 - SUPREME Court). Once the said clause has been struck down, then the payment of leave encashment is a trade liability and not statutory liability, hence, the provisions of section 43B of the Act are not attracted. Direct the Assessing Officer to allow the aforesaid deduction to the assessee.
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