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2021 (9) TMI 139 - AT - Income TaxWeighted deduction claimed u/s.35 (2AB) on research and development expenditure - expenditure incurred outside India for which the assessee raised a claim of weighted deduction u/s.35(2AB) - HELD THAT:- On a conjoint reading of section 35(1) (iv) read with section 35(2), it is manifested that any expenditure of capital nature incurred on scientific research, other than the cost of land etc., qualifies for full one time deduction in the year of such incurring. Unlike sub-section (2AB), sub-section (1) does not require any specific approval from the prescribed authority for this purpose - there is no stipulation that the expenditure should be incurred in India or outside or in-house R&D facility or otherwise, save and except as provided in other clauses of subsection (1) of section 35. However, the amount of deduction u/s.35(1) is equal to the amount of capital expenditure on scientific research. Coming back to the amount of expenditure incurred by the assessee outside India we find that the expenditure of revenue nature was claimed by the assessee as revenue expenditure and accordingly allowed also. It is only the remaining capital expenditure that qualifies for deduction u/s.35(1)(iv). Exception to the claim of the ld. AR for granting Deduction of the capital expenditure on scientific research and development incurred outside India u/s.35(1)(iv) -The amount does not qualify for the weighted deduction. The fact that the claim of the assessee cannot be entertained under one provision does not oust it from consideration under any other provision, if it is otherwise allowable under such latter provision. We have noticed that the amount of capital expenditure incurred on research and development outside India is eligible for deduction u/s.35(1)(iv). The same, therefore, has to be allowed as such. DR’s contention in this regard is sans merit and hence repelled. The entire amount of R&D expenditure incurred in India is eligible for weighted deduction u/s 35(2AB); revenue R&D expenditure incurred outside India as claimed by the assessee got allowed in the assessment itself; total of capital R&D expenditure incurred outside India will be eligible for deduction u/s 35(1)(iv) of the Act.
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