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2023 (8) TMI 1178 - AT - Income TaxDeduction u/s 35(2AB) - revenue expenditure not approved by DSIR - non filing of Form No. 3CL - Till the original assessment proceeding stage, the assessee had not received Form No. 3CL issued by DSIR and therefore the AO disallowed the weighted deduction claimed - assessee though furnished the copy of the order of approval in Form No. 3CM given by DSIR during the assessment proceedings. DSIR issued Form No. 3CL and accordingly, the AO passed an order u/s 154 allowing weighted deduction section 35(2AB) only to the extent of expenditure appearing in Form No. 3CL and remaining revenue expenditure not approved by DSIR disallowed. HELD THAT:- AR furnished the break-up of the allocation of expenditure on clinical trials incurred outside the approved in-house R&D facility - As expenses incurred in respect of bio-equivalence study for the drugs and pharmaceutical formulations manufactured/traded by the assessee. We find that as decided in v/s Cadila Healthcare Ltd. [2013 (3) TMI 539 - GUJARAT HIGH COURT] held that the benefit u/s 35(2AB) is also available in respect of expenditure on clinical trials outside the approved in-house R&D facility. Thus assessee is entitled to claim weighted deduction on expenditure u/s 35(2AB) of the Act in respect of the clinical trial expenses incurred outside the approved in-house R&D facility. As regards, the balance expenditure as per the assessee the same was in relation to electricity expenses, which are directly related to the R&D centre at the Goa unit. Thus, we are of the view that the said expenditure is also eligible for weighted deduction u/s 35(2AB) of the Act in view of the aforesaid findings. Thus AO is directed to grant weighted deduction on the revenue expenditure u/s 35(2AB) as assessee furnish a copy of the order of approval in Form No. 3CM given by DSIR during the assessment proceedings - Decided in favour of assessee.
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