TMI Blog1991 (4) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... oratory, Poona, for carrying out research for manufacture of anhydrous aluminium chloride, from bauxite was not deductible under section 37(1) of the Income-tax Act on the ground of being expenditure of the nature described under section 35 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in rejecting the assessee's claim for deduction of the sum of Rs. 4,52,000 in respect of gratuity liability in view of the provisions of section 40A(7) of the Income-tax Act, 1961 ?" As regards the first question of law, we would like to observe even at the outset that the question, it appears to us, does not bring out the real controversy between the parties. In this context, it may be mentioned that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of research programme undertaken by them at the assessee's instance for manufacture of anhydrous aluminium chloride. Another alternative claim was, of course, that the deduction was allowable under section 37. In paragraph 4 of its order, the Tribunal has given a finding that the contribution for scientific research exclusively falls within the domain of section 35 and hence it could not be considered for deduction under section 37(1). Perhaps, it is for this reason that though the question of law suggested by the assessee was as under: "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the payment of Rs. 1,12,715 to the National Chemical Laboratory, Poona for carrying out research for manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the expenditure as claimed by the assessee under section 35(1)(ii) only and not to the claim under section 35(1)(i). Shri Jetley, learned counsel for the Revenue, has placed reliance on our court's judgment in the case of CIT v. Ghatkopar Estate and Finance Corporation (P.) Ltd. [1989] 177 ITR 222, for the purpose of showing that if an expenditure falls under any of the clauses of sections 30 to 36, it could not be considered under the residuary section 37. There can possibly be no quarrel with that proposition. Section 37 itself clearly lays down so. It can be justifiably held that the claim for deduction cannot be considered under section 37, provided there is a clear-cut finding that a particular expenditure is of the nature referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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