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2015 (4) TMI 881 - BOMBAY HIGH COURT

2015 (4) TMI 881 - BOMBAY HIGH COURT - [2015] 374 ITR 101 (Bom) - Disallowance u/s 14A - Held that:- A judgment of a Division Bench of this Court in the case of Godrej & Boyce Manufacturing Company Limited vs. Deputy Commissioner of Income Tax [2010 (8) TMI 77 - BOMBAY HIGH COURT] wherein held that Rule 8D is prospective and not retrospective. Even otherwise the AO must give finding with respect to the nexus of this expenditure with that of the exempted income before disallowance and must point .....

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capitalised in the books of account as reported by the auditors? - Held that:- . The Tribunal found that once there is no dispute that such expenditure is incurred and the legal provision not warranting any further capitalisation of the amont and in the books of account, the Assessing Officer and the Commissioner erroneously rejected this claim. The Tribunal has also taken care to observe that when the Assessing Officer found that the expenditure on research and development is eligible for dedu .....

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3B to disallow the claim does not arise. By the plain language of this provision and given the factual and admitted position, we do not think that the Tribunal erred in the view that it has taken and hence even with regard to this question. No substantial question of law. - Decided against revenue. - Income Tax Appeal No.1140 of 2013 - Dated:- 9-4-2015 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Petitioner : Mr Arvind Pinto For the Respondent : Mr Sanjiv M Shah ORDER P.C. 1. Parties conced .....

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order and impugning a part of it has been admitted. The Revenue has to independently satisfy us that this appeal raises substantial questions of law. 3. Mr. Pinto would submit that the same indeed raises substantial questions of law. In that he projects the questions at pages 5 (6.1, 6.2 and 6.3). 4. However, in relation to para 6.3 he concedes that a judgment of a Division Bench of this Court in the case of Godrej & Boyce Manufacturing Company Limited vs. Deputy Commissioner of Income Tax 3 .....

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derstanding of the Assessing Officer was completely faulty. The Assessing Officer had not referred to the plain language of section 35. There, the amount which has been incurred for research and particularly scientific research can be claimed. In relation to that at page 80 of the paper-book and from paragraph 11.1 onwards, the Tribunal found that the assessee had incurred expenses on scientific research development which has been recognised by the appropriate authorities. He has shown the expen .....

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nology, Government of India and a letter dated 4th December, 2002, was produced. For that provision to apply, it is sufficient that the assessee incurs the expenditure of a capital nature on scientific research and there is no requirement that such an expenditure should be capitalised in the books of account. The Tribunal found that once there is no dispute that such expenditure is incurred and the legal provision not warranting any further capitalisation of the amont and in the books of account .....

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