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2018 (10) TMI 291 - AT - Income TaxExpenditure incurred for Research & Development u/s 35(1) - advance paid for acquiring research equipments - Held that:- We found that various judicial decision submitted by the Ld. AR upheld the view that the acquisition and installation of the R&D machine is not a prerequisite for allowing deduction u/s 35(1)(iv) and the expenses incurred for constructing and acquiring the fixed assets are allowable with reference to the work in progress and machinery in transit also. Thus, there is no need to interfere with the finding of the CIT(A). Ground Nos. 1 and 2 of the Revenue’s appeal are dismissed. Expenditure for constructing external roads to the factory premises as permissible deduction u/s 37(1) - the ownership remains with government - Held that:- The AO has made the disallowance by observing that as per the contractor the amount was spent on ‘laying and making of RCC Road.’ The AO also observed that this road was exclusively the asset of the assessee, or even otherwise there was no obligation on the assessee to constructed this road. The A.O treated the amount as capital expenditure by relying on Travencore Cochin chemical Ltd. [1977 (1) TMI 2 - SUPREME COURT]. However, in this case the issue was related to construction of new roads and not repairs of existing roads. As going through the decision of the Apex Court and also the fact that the road were only being strengthened through RCC, the observations of the A.O are not based on findings regarding ownership of the road with the appellant or whether new roads had been laid out from scratch. - Decided against revenue
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