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2020 (3) TMI 333 - AT - Income TaxDeduction claimed u/s. 35(2AB) - AO had disallowed claim as the assessee had carried out certain expenditures outside the in-house R&D center - HELD THAT:- CIT(A) correctly allowed relief to the assessee keeping in view the judgment of Hon’ble Gujarat High Court in the case of Cadila Healthcare Ltd. [2013 (3) TMI 539 - GUJARAT HIGH COURT] where the Hon’ble Court had held that clinical trials conducted outside approved facility were eligible for exemption under s.35(2AB) of the Act. - Decided against revenue Disallowance on account of depreciation on electric installations - AO had restricted the depreciation to 15% instead of 25% by holding that electrical fittings are eligible for depreciation at a particular rate prescribed under the Rules - HELD THAT:- As before the learned CIT(A), the assessee demonstrated that electrical installations were connected to plant and machinery and were parts of plant and machinery itself. It was also submitted to learned CIT(A) that similar disallowance was made in the case of assessee in AY 2009-10 [2010 (7) TMI 1096 - ITAT AHMEDABAD] which the learned CIT(A) had deleted. The learned CIT(A) has also allowed relief to the assessee by following the order of Hon’ble ITAT in the case of assessee itself for AYs. 2005-06 & 2009-10. - Decided against revenue Disallowance on account of prior period expenses - HELD THAT:- CIT-A after noting down the break up of expenses which were classified by the assessee as per prior period expenses and the year of their crystallization rightly deleted the addition by holding that it is clear from the details given by the appellant that the appellant had proper explanation with supporting evidence to prove that the liability is crystallized only in the previous year - AO is directed to allow prior period expenses - Decided against revenue TDS u/s 195 - disallowance on account of foreign commission expenses for non deduction of TDS - HELD THAT:- This issue is also covered in favour of the assessee vide order of Hon’ble ITAT for AY 2009-10 [2010 (7) TMI 1096 - ITAT AHMEDABAD] in the case of assessee itself where the Hon’ble Tribunal after discussing the entire fact and after noting down the provisions of Section 9(1)(vii) and Section 195 of the Act has held that the provisions of Section 195 and Section 9 were not applicable to the assessee and therefore has held that assessee was not liable to deduct TDS and therefore no disallowance was warranted under s.40(a)(ia) Disallowance on account of product registration fees - Allowable revenue expenses - HELD THAT:- This issue is now covered, in favour of the assessee, by Hon'ble jurisdictional High Court's judgments in the cases of CIT v. Torrent Pharmaceutical Ltd. [2013 (4) TMI 570 - GUJARAT HIGH COURT] and CIT v. Cadila Healthcare Ltd.[2013 (3) TMI 539 - GUJARAT HIGH COURT] wherein Their Lordships have, inter alia, held that the product registration expenses is eligible for deduction as revenue expenditure. Disallowance of the professional fees on patent - revenue or capital expenditure - HELD THAT:- Where a sum of money is laid out for the acquisition or the improvement of a fixed capital asset it is attributable to capital but of no alteration is made in the fixed capital asset by the payment, then it is properly attributable to revenue, being in substance a matter of maintenance, the maintenance of the capital structure or the capital asset of the company. In our opinion, the advantage derived by the owner of the trade mark by registration falls within this class of expenditure The fact that a trade mark after registration could be separately assigned, and not as a part of the good will of the business only, does not also make the expenditure for registration a capital expenditure. That is only an additional and incidental facility given to the owner of the trade mark. It adds nothing to the trade mark itself. The observation of the AO and the submission of the appellant is considered carefully. As the facts of the case on this point are similar to the facts dealt with by the Hon'ble High Court of Gujarat in case of Cadila Healthcare Ltd. [2013 (3) TMI 539 - GUJARAT HIGH COURT] respectfully following the decision, the AO is directed to allow the professional fees - Decided in favour of assessee
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