TMI Blog2019 (11) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 - ITAT MUMBAI] CIT has not countered the specific submissions of the assessee on this issue. Even, she has not denied the fact that as per the decision of the Tribunal in the case of ACIT vs. Wockhardt Ltd [ 2012 (5) TMI 823 - ITAT MUMBAI] , only Research Development expenditure has to be reduced and not the income. By merely stating that the department has contested the decision of the Tribunal in the case of ACIT vs. Wockhardt Ltd (supra) by filing a reference in the Hon ble Bombay High Court, she has directed the Assessing Officer to net off the contract Research Development income in place of Research Development expenditure. In the aforestated premises, in our view, assessment order passed cannot be held to be erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 22.03.2016, determining total income under the normal provisions of the Act at ₹ 124,62,26,341/- and book profit of ₹ 303,96,67,508/- u/s. 115JB of the Act. Since the tax computed on the total income under the normal provisions was less than tax on the book profit computed u/s. 115JB of the Act, the Assessing Officer ultimately, assessed the total income u/s. 115JB of the Act. Against the assessment order so passed, assessee preferred appeal before learned CIT(A). However, in the present appeal, we are not concerned with the issues raised in the said appeal. When the matter stood thus, the learned CIT called for and examined the records of the assessee in exercise of power u/s. 263 of the Act. While doing so, she found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d submissions on 28.02.2018, objecting to the proposed action of learned CIT for setting aside the assessment order. It was submitted by the assessee that the weighted deduction claimed u/s. 35(2AB) of the Act is in terms with the statutory provisions and after fully complying with all the conditions mentioned therein. Further, it was submitted, in the course of assessment proceedings, the Assessing Officer had made detailed enquiry with regard to assessee s claim of weighted deduction and, being satisfied that assessee has fulfilled conditions of section 35(2AB) of the Act had allowed the claim. Further, it was submitted, since, as per the provisions of section 35(2AB) of the Act, deduction has to be allowed on the basis of Research Deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted, as per section 35(2AB) of the Act, deduction has to be allowed on the basis of expenditure incurred for Research Development. He submitted, the expenditure incurred by assessee in Research Development in its in-house Research Development facilities has been certified by competent authorities and all conditions of section 35(2AB) have been fulfilled. He submitted, considering the fact that it has carried out Research Development work on behalf of its AE on contractual basis, assessee had voluntarily excluded the contract Research Development expenses while computing deduction u/s. 35(2AB) of the Act. He submitted, the statutory provision nowhere speaks of computation of weighted deduction after reducing income. In support h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy its claim of deduction u/s. 35(2AB) of the Act. It is also noticed, during the assessment proceedings, the Assessing Officer had enquired into the issue and, thereafter, has allowed assessee s claim of deduction u/s. 35(2AB) of the Act. In fact, neither in the show cause notice nor in the impugned order passed u/s. 263 of the Act learned CIT has made any allegation regarding non-enquiry or even lack of enquiry by the Assessing Officer on the issue. The limited point of dispute raised by learned CIT, is instead of reducing contract Research Development expenditure, assessee should have reduced contract Research Development income for computing deduction u/s. 35(2AB) of the Act. Pertinently, while replying to this particular aspect rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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