TMI Blog2015 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... for claiming weighted deduction u/s 35(2AB) - there is justification for reopening of assessment - assessee is entitled for 100% of the allowance at present and as and when received Form 3CM, weighted deduction may be allowed. Restriction placed in Section 35(2AB) will apply only in the case when amount was allowed u/s 35 itself - These two provisions are mutually exclusive but an assessee can claim a particular deduction either u/s 35 or u/s 37 so long as the amount spent is for the purpose of business – there was no merit in the AO’s contention that the amount once considered u/s 35 cannot be considered u/s 37 – Decided in favour of assessee. - ITA No. 108/Hyd/2014 - - - Dated:- 24-12-2014 - Shri P. M. Jagtap And Smt. Asha Vijay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to be disallowed at 50% of (C) 59,57,764 E. Weighted deduction claimed at 150% u/s. 35(2AB) on (A) above 15,93,96,792 F. Weighted deduction allowable at 150% u/s. 35(2AB) on (B) above 14,15,23,500 G. Amount disallowed by AO 1,78,73,292 3. The assessee objected to the proposal and claimed that the disallowance can be only in an amount of ₹ 59,97,764. i.e., at 50% of the expenditure of ₹ 1,19,15,528 which was not approved. The AO, however, disallowed 150% of the amount not approved which worked out to ₹ 1,78,73,292. Aggrieved by the disallowance of ₹ 1,78,73,292 the assessee appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel submitted that in these circumstances there is no merit in the grounds of appeal taken by the Department. In this connection the counsel relied on the decision of this Tribunal An Bench, Hyderabad dated 28-05-2014 in the case of Nagarjuna Agrichem Ltd., in ITA Nos. 998, 1033,1250 and 1251/ Hyd/ 2010 and ITA No. 1376/Hyd/2011 wherein the Tribunal upheld the claim of the assessee for allowance of 100% deduction u/s. 37 of the Act in respect of the amount which remained to be approved by DSIR. 6. We have heard both the parties and perused the material on record and find that the co-ordinate Bench has adjudicated on similar issue in the case of DCIT vs. Nagarjuna Agrichem Ltd. in ITA Nos. 998, 1033, 1250, 1251/Hyd/2010 and 137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s his submission that assessee is entitled for the 100% of the amount spent if not at 150%. He referred to the orders of the Coordinate Bench in assessee s own case as well as the Coordinate Bench decision in the case of Electronics Corporation of India Ltd., (ECIL), Hyderabad vs. ACIT in ITA. No. 1106/ Hyd/2011 dated 25.09.2012. 9. We have considered the issue and examined the provisions of the Act as well as facts on record. In A.Y. 2002-03 there is no disallowance under section 35(2AB) as the assessee had relevant approval at that point of time. In A.Y. 2004-05 since the renewal of R D has not come in time, the A.O. disallowed the claim and has not allowed even 100% of the amount which otherwise is eligible under the provisions. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. As per the provisions of sec 35(2AB) of Act as applicable to the relevant Assessment year , the expenditure incurred by the assessee in any approved in-house research facility, to the extent of approved by the prescribed authority, is entitled to weighted deduction of 150% of such approved expenditure. Therefore, the expenditure as approved by the DSIR in the certificate given by them in Form 3CL alone is to be granted weighted deduction. The DSIR in their certificate has certified expenditure eligible for weighted deduction as ₹ 3,126.02 lakhs. Therefore, it is not for either the assessing authority or the appellate authority to decide on the expenditure which will be entitled to weighted deduction u/s.35(2AB). In fact, U/s. 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on this issue. 11. Therefore, we are of the opinion that assessee is entitled for 100% of the allowance at present and as and when received Form 3CM, weighted deduction may be allowed. With these observations/directions, A.O. is directed to allow 100% of the amount immediately and weighted deduction as and when Form 3CM received. 12. Assessee also made an alternate contention that this amount is also eligible for deduction under section 37(1). It was the contention of the A.O. that by virtue of section 35(2A)(ii) of the Act, assessee would not be eligible for deduction under any other provisions of the Act. Sub-clause 2 of section 35(2AB) can only be invoked when the amount is allowed under section 35(2AB). In case the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
