Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 830 - AT - Income TaxDeduction u/s 35(2AB) - in-housing Scientific Research and development expenditure of the Sipaigachhi Unit, where the DSIR does not approve of such expenditure in the Form 3CL - Whether the CIT(A) was correct in holding that in order to avail up the deduction u/s 35(2AB) irrespective of the date of recognition and the cut off date mentioned in the certificate of the prescribed authority the existence of recognition is required? - scope of amendment - HELD THAT:- The provision we note nowhere suggests or implies that R&D facility should be approved from a particular date and in other words, it is nowhere suggested that date of approval only will be cut off date for eligibility of weighted deduction on the expenses incurred from that date onwards. The statute does not say that and therefore, AO erred in prescribing something which is not in the statute and thus not allowing the claim on this reason also is erroneous. It is only w.e.f 01.07.2016 with the amendment to Rule 6(7a)(b) of the Rules that the quantification of the weighted deduction u/s 35(2AB) of the Act has significance. We note that for claiming deduction u/s 35(2AB) the assessee should be engaged in manufacture of certain articles or things as stipulated in that provision. It is not in dispute that the assessee is engaged in the business to which Section 35(2AB). It is not in dispute that the assessee in this case received recognition of its R&D unit at Sipaigachi vide letter dated 26.03.2013 vide page 73 of PB. In the aforesaid facts and circumstances we are of the view that the deduction u/s 35(2AB) of the Act ought to have been allowed as weighted deduction at 200% of the expenditure as claimed by the assessee. Neither the prescribed authority (Refer page 82 & 83 of PB) nor the AO has applied the mind as to the expenditure, actually incurred for the R&D facility at Sipaigachi. Merely because the prescribed authority (DSIR) failed to send intimation in Form 3CL in respect of expenditure incurred by R&D unit at Sipaigachi would not be reason enough to deprive the assessee’s claim of deduction u/s 35(2AB) - Since the verification has not been done by the prescribed authority (DSIR) or the AO, we set aside the impugned order of the Ld. CIT(A) and remand this issue for the limited purpose to the file of AO to verify the actual expenditure incurred by the assessee in respect of its R&D establishment at Sipaigachi - Appeal of the revenue is partly allowed.
|