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2021 (2) TMI 716 - AT - Income TaxWeighted deduction u/s 35(2AB) denied - case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued - CIT(A) observed that the assessee has not maintained separate books of accounts for R&D facility, and hence it is not verifiable as to how much expenditure they actually incurred for research development activity - HELD THAT:- CIT(A) has put reliance on form no. 3CL. To our mind this reasoning is not sustainable because the assessee is a company which has returned income of more than ₹ 20.67 cores. It has given list of expenditure, which we have taken cognizance while extracting the submissions of the assessee filed before the ld. CIT(A). The first item in this list is consumption of stores and spare parts. It has been quantified at ₹ 2,82,703/-. This item cannot be an item from overall list of spares and stores of a company whose returned income is more than ₹ 20.67 crores. Thus, according to the assessee, it has submitted complete details during the assessment proceedings as well as before the ld. CIT(A). But none has bothered to look into. After perusal of the details of expenditure, we are of the view that the ld. CIT(A) has failed to analytically examine the claim of the assessee. He simply proceeded on basis of the list of expenditure submitted before the DSIR. Provision nowhere contemplates that assessee would claim deduction only those expenditure whose details has been forwarded to the DSIR for the purpose of availing certificate of approval for organization engaged in research activity. If an assessee independently demonstrates expenditure in the research activity (see the submission extracted above), then their nature is required to be looked into before taking a call for an addition. No such efforts were made by the Revenue authorities. Therefore, orders of the Revenue authorities are not sustainable. - Decided in favour of assessee.
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