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2019 (7) TMI 1214 - AT - Income TaxDeduction u/s 35(2AB) - in-house research and development - alleged that the assessee has not furnished copy of the agreement entered into with the prescribed authority for carrying out inhouse research and development facility - HELD THAT:- Deduction u/s.35(1)(i) and Sec.35(2AB) are similar except that the deduction u/s.35(2AB) is allowed as weighted deduction at 200% of the expenditure while deduction u/s.35(1)(i) is allowed only at 100%. The conditions for allowing deduction u/s.35(1)(i) and under Sec.35(2AB) are identical with the only difference being that the Assessee claiming deduction u/s.35(2AB) should be engaged in manufacture of certain articles or things. It is not in dispute that the Assessee is engaged in business to which Sec.35(2AB) applied. The other condition required to be fulfilled for claiming deduction u/s.35(2AB) is that the research and development facility should be approved by the prescribed authority. The prescribed authority is the Secretary, Department of Scientific Industrial Research, Govt. Of India (DSIR). It is not in dispute that the Assessee in the present case obtained approval in Form No.3CM as required by Rule 6 (5A) of the Rules. In these facts and circumstances and in the light of the judicial precedents on the issue, we are of the view that the deduction u/s.35(2AB) of the Act ought to have been allowed as weighted deduction at 200% of the expenditure as claimed by the Assessee and ought not to have been restricted to 100% of the expenditure incurred on scientific research. We hold and direct accordingly and allow the appeal of the Assessee - See M/S. MAHINDRA ELECTRIC MOBILITY LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4 (1) (2) , BANGALORE. [2019 (1) TMI 20 - ITAT BANGALORE] As decided in M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. [2019 (4) TMI 1727 - ITAT AHMEDABAD] merely because the prescribed authority failed to send intimation In Form No. 3CL, would not be reason enough to deprive the assessee`s claim of deduction under section 35(2AB) of the Act. Disallowance u/s 14A - assessee submitted that the assessee has earned exempt agricultural income but has no exempt income by way of dividend from shares and investments - HELD THAT:- As agreed by both the parties, we set aside this issue to the file of the AO for fresh adjudication in accordance with law after verifying the fact. AO is directed to apply proposition of law laid down by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] and not to disallow any expenditure in excess of exempt income earned by the assessee. These grounds are allowed for statistical purposes.
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