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2020 (3) TMI 345 - HC - Income TaxDisallowance of R&D expenditure - HELD THAT:- Expenditure was incurred by the assessee for and on behalf of the partnership firm and therefore it was not for the purpose of assessee’s business. The second objection was with respect to correlation of such expenditure for setting up in-house R&D facilities. The Commissioner agreed with the first contention in part and granted only pro-rata relief in terms of the proportionate exports of the assessee. Weighted deduction u/s 35(2AB) of clinical trial expenses incurred outside the approved facility - HELD THAT:- Often times in the field of research and invention, the efforts undertaken may or may not yield fruitful results. What is to be ascertained is whether any scientific research was undertaken and not whether such scientific research resulted into the ultimate aim for which such research was undertaken. It can be easily envisaged that the scientific research undertaken often times would completely fail to achieve desired results. That by itself does not mean that no scientific research was undertaken. What the Legislature desired to encourage by granting deduction under section 35(1) of the Act was a scientific research and not necessarily only the successful scientific research undertaken by an assessee. Tribunal committed no error. Merely because the prescribed authority segregated the expenditure into two parts, namely, those incurred within the in-house facility and those can were incurred outside, in our opinion, by itself would not be sufficient to deny the benefit to the assessee under section35(2AB) of the Act. It is not as if that the said authority was addressing the issue for deduction under section 35(2AB) of the Act in relation to the question on hand. The certificate issued was only for the purpose of listing the total expenditure under the Rules. See Commissioner of Income-tax – I vs. Cadila Healthcare Ltd [2013 (3) TMI 539 - GUJARAT HIGH COURT]
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