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2022 (8) TMI 1287 - AT - Income TaxDeduction of research and development expenditure claimed by the appellant under section 35(2AB) - HELD THAT:- Scientific research expenses incurred at approved in-house R & D facility are eligible for weighted deduction u/s 35(2AB) of the Act, whether incurred prior to or post the date of such approval by DSIR mentioned in Form 3CM - See Claris Lifesciences Ltd., Sandan Vikas India and Maruti Suzuki India Ltd. vs Union of India & Anr. [2017 (8) TMI 248 - DELHI HIGH COURT] Deduction under section 35(2AB) cannot be denied in respect of recognized in-house R & D centre even though approval in Form 3CM for the relevant years was under consideration or awaited - See CIT vs TVS Electronics Ltd. [2019 (5) TMI 112 - MADRAS HIGH COURT] and Minilec India (P.) Ltd. [2018 (4) TMI 1058 - ITAT PUNE] Expenditure eligible for deduction under section 35(2AB) of the Act cannot be restricted to the amount of expenditure certified by Department of Scientific and Industrial Research (‘DSIR’) in Form 3CL - See ACIT vs Torrent Pharmaceuticals [2009 (11) TMI 819 - ITAT AHMEDABAD], Coromandel International Ltd. [2014 (9) TMI 510 - ITAT HYDERABAD], Cummins India Ltd. vs DCIT [2018 (5) TMI 1314 - ITAT PUNE] Deduction under section 35(2AB) cannot be denied merely on the ground that prescribed authority has not submitted report in Form 3CL - See Sun Pharmaceutical Industries Ltd. [2016 (12) TMI 1539 - ITAT AHMEDABAD] Sri Biotech Laboratories India Ltd. and STP Ltd. [2014 (10) TMI 171 - ITAT HYDERABAD] Amendment in Rule 6(7A) of IT Rules, 1962 regarding quantification of weighted deduction under section 35(2AB) in Form 3CL applies prospectively w.e.f. 01.07.2016 - See Provimi Animal Nutrition India Pvt. Ltd. [2020 (12) TMI 177 - ITAT BANGALORE] Crompton Greaves Ltd. and Force Motors [2019 (10) TMI 134 - ITAT MUMBAI] Learned Departmental Representative could not controvert that the issue stands covered in favour of the assessee by aforesaid decision of the Hon’ble High Courts. It is settled law that decisions of High Court prevails over lower courts and Tribunals. Hence, we hold that as per extant provision, the claim is allowable. Accordingly, we set-aside the orders of authorities below and decide the issue in favour of the assessee. Allowability of ESOP expenses - Additional Ground of appeal - HELD THAT:- We admit this additional ground. In this, the Ld. Counsel for the assessee submitted that he shall be relying on ITAT Special Bench decisions in case of Biocon Limited [2013 (8) TMI 629 - ITAT BANGALORE] which was affirmed by the Hon’ble Karnataka High Court [2020 (11) TMI 779 - KARNATAKA HIGH COURT] However, he fairly agreed that these decisions were not there when the matter was considered by revenue authorities. Hence, he prayed that this issue may be remitted to the file of the AO to decide as per the ratio arising in these case laws.
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