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2022 (1) TMI 327 - ITAT DELHIDeduction u/s 35(2AB) - scientific research and development expenditure - denial of deduction as approving authority has not approved the research and development expenditure of the assessee approving authority has not approved the research and development expenditure of the assessee - HELD THAT:- Assessee has in house research and development Center which has been recognized and approved for deduction u/s 35(2AB) since FY 2004-05 as per CBDT letter dated 29.09.2004. The assessee has been continuously granted deduction up to Assessment Year 2013-14 We find that there is no such amendment made in the income tax to this effect for Assessment Year 2014-15 and therefore, same cannot be imputed in the Act. Further, w.e.f. 01.04.2016, the income tax Rules has been amended and Form No. 3CL has been introduced which is required to be uploaded along with return of income. Further, Form No. 3CL in para 3 is also required to state amount of expenditure claimed by the assessee by to be certified by “an accountant‟ but this applicable from 01.04.2016. In view of the above facts and perusal of the order of the ld CIT(A) we do not find any infirmity in the claim of the assessee for deduction u/s 35 (2AB) of scientific research and development expenditure amounting to ₹ 468.98 lakhs. - Decided in favour of assessee. Addition u/s 37(1) - Expenditure not eligible for weighted deduction u/s 35(2AB) - HELD THAT:- We find that such R&D expenditure though not eligible for weighted deduction u/s 35(2AB) but is allowable as deduction u/s 37(1) of the Act to the extent of amount of expenditure incurred by the assessee. The assessee should have been allowed deduction of above sum as normal allowable expenditure u/s 37 (1) of the act . The ld CIT(A) did not deal with this aspect. In view of this, we direct the ld AO to allow the assessee deduction u/s 37(1) of the Act at a sum of ₹ 8.41 lakhs. Accordingly, appeal of the assessee is allowed.
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