9911796707
TMI Blog2019 (2) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee, a company, filed its return of income for the impugned assessment year on 25.10.2011 declaring total income at Rs. 9,97,26,850/-. During the assessment proceedings the Assessing Officer (AO), while examining the computation of total income filed by the assessee noticed that the assessee has claimed deduction @ 200% under section 35(2AB) of the Act on account of expenditure incurred towards Research and Development (R&D). On verification of the audit report he found that the aforesaid deduction claimed under section 35(2AB) of the Act comprises of capital as well as revenue expenditure. Accordingly, he called upon the assessee to justify the deduction claimed under section 35(2AB) of the Act by furnishing proper document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 31,85,292/- under section 271(1)(c) of the Act. Being aggrieved of the aforesaid penalty order, though, the assessee filed an appeal before the CIT(A), however, the CIT(A) also upheld imposition of penalty. Being aggrieved of the aforesaid order of the learned CIT(A) assessee is before us challenging the imposition of penalty both on merit as well on legal grounds raised by way of additional ground. 3. The learned Authorised Representative (A.R.) submitted, while filing the return of income the assessee has claimed deduction under section 35(2AB) of the Act as per the audit report of the Auditor. He submitted, even in the application filed before the DSIR the assessee has sought approval for the R&D expenditure as per the audit repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B) of the Act. He submitted, the dispute is only on the quantum of deduction and not with regard to allowability. Thus, he submitted, in any case of the matter the assessee has claimed certain deduction part of which was disallowed by the AO. However, that by itself would not lead to imposition of penalty under section 271(1)(c) of the Act. In this context he relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts 322 ITR 150. Further he relied upon the decision of the ITAT Mumbai Bench in the case of Mrs. Indrani Sunil Pillai vs. ACIT in ITA No. 1339/ Mum/2016 dated 19.01.2018. 4. The learned Departmental Representative (D.R.) strongly relying upon the observations of the Department authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35(2AB) of the Act mentioned in the tax audit report the assessee also filed its application for approval of expenditure before the DSIR. It is evident from the impugned assessment order that the AO vide order sheet entry dated 04.08.2013 and 29.08.203 called upon the assessee to furnish details of R&D expenditure and other documentary evidences to justify its claim of deduction under section 35(2AB) of the Act. It is also evident that the assessee in its reply dated 22.11.2013 has intimated the AO about the receipt of approval of DSIR in Form No.3CL dated 12th February, 2013 and also accepted the fact that the DSIR has disallowed a part of the expenditure claimed of Rs. 1,64,16,073/-. Accordingly, vide letter dated 02.12.2013 assessee vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under section 35(2AB) of the Act. In fact, the DSIR has not only recognised the R&D facility of the assessee but also approved the expenditure incurred by the assessee in respect of the R&D facility. The dispute arises only with regard to the quantum of deduction claimed on account of part disallowance of expenditure by the DISR. As observed earlier, the certificate of the DSIR in Form No. 3CL disallowing part of the expenditure was received by the assessee in November, 2013, i.e. at a much later stage, even after the AO has started enquiry with regard to assessee's claim of deduction under section 35(2 AB) of the Act. Thus, upon considering the overall facts and circumstances of the case we are of the considered opinion that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
