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TMI Blog2017 (10) TMI 1417X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s. 35 (2AB) of I. I. Act, 3. As per facts & circumstances of the case the Learned Assessing Officer erred in not considering the fact that the appellant company had already incurred both revenue & capital expenditure before appellant company got the certificate in form no 3CK & 3CM. Reliance is placed on AARTI Industries LTD Addl CIT ITAT Mumbai A BENCH (33 CCH 279 Mum) 4. As per facts & circumstances of the case the Learned Assessing Officer erred rejecting revised return filed u/s 139(5), on 2nd February 2013 which was mainly to correct the error in the computation of adding back capital expenditure of Rs. 16,55,318 to the net profit to arrive at gross total income. In fact capital expenditure was never debited to P&L A/C, besides there was erred in claiming depreciation of Rs. 16,19,678 in the original return as against allowable depreciation of Rs. 15,23,618 claimed in the revised return." 2. The brief facts of the case are that the assessee company engaged in the business of manufacturing rust preventive chemicals and adhesives, has filed its return of income for the assessment year 2010-11 declaring total income of Rs. 4,57,069 under normal provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n claimed by the assessee u/s 35(2AB) of Rs. 37,20,504 has been disallowed and added to the income of the assessee. 3. Aggrieved by the assessment order, the assessee preferred appeal before the CIT(A). Before CIT(A), the assessee has reiterated its stand taken before the AO to argue that once its R&D facility has been recognized by the competent authority, i.e. Secretary, Department of Scientific and Industrial Development & Research, Government of India. Obtaining a certificate in prescribed form is a formality, therefore, it is eligible for claiming weighted deduction for the assessment year 2011-12 even though its approval has come from AY 2012-13 onwards. In this regard, the assessee has relied upon the decision of Hon'ble Gujarat High Court in the case of Claris Lifesciences Ltd v. CIT [2008] 174 Taxman 113/[2010] 326 ITR 251 and Hon'ble Delhi High Court in the case of CIT v. Sandan Vikas India Ltd [2011] 335 ITR 117/[2012] 22 taxmann.com 19/207 Taxman 216. 4. The CIT(A), after considering relevant submissions of the assessee observed that it is an undisputed fact that the assessee's R&D facility has been approved by the competent authority with effect from 01-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scientific and Industrial Development & Research, Government of India (DSIR) or even the date of approval but the existence of the recognition if an R&D Centre is not recognized, it is not entitled to deduction. But if it is recognized, it is entitled to the benefit. In this case, the assessee's R&D facility is recognized by the competent authority and taking approval in the prescribed form is a formality for which the benefit of deduction cannot be denied. 6. On the other hand, the Ld.DR strongly supported the order of the CIT(A) submitted that the CIT(A) submitted that the CIT(A) has brought out clear facts to the effect that the assessee's R&D facility is approved wef 01-04-2011 and hence, the assessee is not entitled for weighted deduction for the impugned assessment year. Insofar as case laws relied upon by the assessee, the Ld.DR pointed out that in the case of Claris Lifesciences Ltd (supra), the assessee has filed application in the financial year relevant to the assessment year and the AO has denied the benefit of deduction prior to the date of application, but within the same financial year. In the above circumstances, the Hon'ble Court observed that the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed under the Act, can approve the R&D facility in prescribed form 3CM with intimation to the department through proper channel. In this case, the facts with regard to the assessee's R&D expenditure and recognition from the competent authority are not doubted by the lower authorities. The only dispute is with regard to the period of approval. As per the certificate issued by the competent authority in Form 3CM assessee's R&D facility has been approved for the period from 01- 04-2011 to 31-03-2013 on the basis of application filed by the assessee in prescribed form 3CK on 12-08-2011. Therefore, we are of the view that the assessee is not entitled for weighted deductions towards its R& expenditure for the assessment year under consideration. 8. Coming to the case laws relied upon by the assessee, the assessee has relied upon the decision of Hon'ble Gujarat High Court in the case of Claris Lifesciences Ltd (supra). We have gone through the case laws relied upon by the assessee in the light of the facts of the present case and find that the facts of the case relied upon by the assessee in Claris Lifesciences Ltd (supra) is altogether different from the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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