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2022 (3) TMI 26 - AT - Income TaxDisallowance of commission to persons specified u/s 40A(2)(b) - HELD THAT:- In our view, since the facts in the immediately preceding year [2021 (9) TMI 161 - ITAT AHMEDABAD] both in respect of the nature of payments i.e. commission paid as well as the parties to whom the payments were made are identical as held that AO has not demonstrated any material or information gathered to disprove the genuineness of the expenditure incurred on commission payment - we accordingly allow the assessee’s appeal and the disallowance on account of commission u/s. 40A(2)(b) is hereby deleted. Disallowance of claim of deduction u/s 35(2AB) - research and development expenses - HELD THAT:- We note that the ITAT, Ahmedabad for the immediately preceding year on identical set of facts has adjudicated the issue in favour of the assessee. The ITAT in the above Ruling held that this issue has been dealt with by the ITAT Ahmedabad in the case of Sun Pharmaceuticals v Pr. CIT [2016 (12) TMI 1539 - ITAT AHMEDABAD] which has been approved by the Gujarat High Court [2017 (8) TMI 933 - GUJARAT HIGH COURT] We also note that the ITAT Pune Tribunal in the recent case of DCIT v. Force Motors [2021 (9) TMI 244 - ITAT PUNE]while dealing with identical issue held that prior to amendment in 2016, section 35(2AB) of the Act does not provide any methodology of approval to be granted by prescribed authority vis-a-vis expenditure from year to year and therefore, order of Assessing Officer in curtailing expenditure and consequent weighted deduction claimed under section 35(2AB) on ground that deduction cannot exceed claims approved by prescribed authority, had rightly been set aside. The position is clear that prior to amendment introduced w.e.f. 01/07/2016, the deduction u/s 35(2AB) of the Act would be available to an assessee having an approved in-house R&D facility by the prescribed Authority Act and there is no mention of approval of the ‘quantum’ of expenditure in the law as it stood prior to that date. The mandate of quantification of expenditure has been put in place only w.e.f. 01.07.2016. In view of the above observations and also the decision of the Ahmedabad Tribunal in assessee’s own case for immediately preceding year, where on identical set of facts, the assessee’s appeal has been allowed, we allow the appeal of the assessee.
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