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2020 (11) TMI 114 - AT - Income TaxDisallowance of R & D expenditure - assessee claimed deduction u/s 35 (1) (iv) on the ground that it related to research and development capital expenditure - AO rejected the claim of deduction by observing that assessee was involved in the manufacturing and testing of auxiliary groomed aluminum ammonia heat pipes used in spacecrafts by using the technology provided by Indian Space Research Organization (ISRO), and not out of it’s own research and development - HELD THAT:- As submitted by assessee in written submission filed before CIT(A) dated 12/04/2013 that, though said intimation may not be relevant for the year under consideration, however the fact that this recognition has come after continued and sustained activities carried on in the field of research over several years as observed by Government of India cannot be ignored. Under such circumstances it is relevant that necessary steps may be taken to ascertain if assessee could be considered to be carrying out research and development activities during the relevant period. Ld.CIT(A) having observed the same has not taken necessary steps. The issue considered by Ld.CIT(A) needs to be ascertained based upon the facts in present case. We therefore find it proper to remand the issue back to Ld.CIT(A) to take necessary actions/steps to ascertain, whether assessee could be considered to be carrying out with research and development activity during the relevant period under consideration, based on the recognition issued by Ministry of Department of Science and Technology Government of India in January 2012. We remand the issue Ld.CIT(A) for necessary steps. Issues raised by revenue stands allowed for statistical purposes.
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