TMI Blog2021 (3) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... al u/s.35(2AB) of the Act and in any case for AY 2011-12, there was in fact an approval dated 19.1.2011. The Assessee is therefore entitled to deduction u/s.35(2AB) of the Act. We hold and direct accordingly. - ITA No. 1352/BANG/2015 - - - Dated:- 9-3-2021 - SHRI N. V. VASUDEVAN , VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER Revenue by : Shri. Pradeep Kumar , CIT (DR) , ITAT, Bengaluru Assessee by : Shri. S. Annamalai , Advocate ORDER Per N. V. Vasudevan , Vice President This is an appeal by the Assessee against the order dated 9.9.2015 of CIT(A) Kalaburagi, relating to AY 2011-12. 2. One of the issues that arose for consideration in the appeal by the assessee for AY 2011-12 was with regard to the allowability of the assessee for weighted deduction u/s 35(2AB) of the Income Tax Act 1961 (the Act). Similar issue arose for consideration in the Assessee s appeal for AY 2010-11 also in ITA No.1351/Bang/2015. The appeals for AY 2010-11 and 2011-12 were heard together and a common order was passed by the Tribunal. On the issue of allowing deduction u/s.35(2AB) of the Act, the Tribunal came to the following conclusion in its order dated 6.2.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o subsequent AY 2012-13. Of course, a deduction is allowed in Assessment in AY 2012-13. The decision in the case of Claris Life Sciences, is distinguishable for the reason that Approval in that case was received during the year itself. Whereas in the case on hand, as said above, the Approval is received not during the current year. In the circumstances, I take the view that the Appellant is not eligible to take a deduction in the current AY. Accordingly. I uphold the stand of the AO in disallowing the deduction. 8. Aggrieved by the order of CIT(Appeals), the assessee is in appeal before the Tribunal. 9. The ld. counsel for the assessee apart from relying on the decision of the Hon ble Gujarat High Court in the case of Claris Life Science (supra) further placed reliance on the decision of Hon ble Delhi High Court in the case of CIT v. Sandan Vikas (India) Pvt. Ltd., 335 ITR 117 (Del) laying down identical proposition and also on the decision of the Hon ble Gujarat High Court in the case of Banco Products (I) Ltd., 405 ITR 318 (Guj). 10. We have perused the aforesaid decisions and we find that in the case of Claris Lifesciences (supra), weighted deduction was claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to AY 2012-13. 34. We have already held while deciding identical ground for AY 2010-11 that the deduction has to be allowed for AY 2011-12 because the application for grant of approval to the prescribed authority was made by the assessee on 12.5.2011 i.e., during the relevant previous year. In the circumstances, the decision of the Hon ble Gujarat High Court in the case of Claris Lifesciences Ltd. (supra) as well as the decision of the Hon ble Delhi High Court in the case of Sandan Vikas (I) Ltd. (supra) will be applicable. Following the aforesaid decisions, we hold that the assessee should be allowed weighted deduction u/s. 35(2AB) of the Act for AY 2011- 12. Thus, the relevant grounds of appeal are allowed. 4. The revenue filed MP No.119/Bang/2020 against the order of the Tribunal dated 6.2.2020. In the MP the revenue has pointed out that the conclusions of the Tribunal for AY 2010-11 was that if the application for grant of approval is made to the prescribed authority during the previous year, then the deduction has to be allowed even though the approval is obtained at a later date. If this analogy is applied to AY 2011-12, the application for approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is reference to application dated 12.05.2011. He pointed out that the application for issue of Form No.3CM is not relevant for allowing deduction under section 35(2AB) of the Act. In this regard, the learned Counsel drew our attention to the decision of Hon ble Gujarat High Court in the case of Banco Products India Ltd., Vs. DCIT 405 ITR 318 (Guj) wherein the Hon ble Gujarat High Court dealing with the case for Assessment Year 2008-09 held as follows: In view of above referred two decisions and by applying the same to the facts on hand, one has rr-hesitation in allowing the assessee's claim for deduction under section 35(2AB). Shorn of ans.) controversy, documents on record would suggest that at any rate, the assessee had applied for approval of research and development facility to the prescribed authority on 22-12- 2006 and such approval was granted on 22-10-2008. The Assessing Officer and Commissioner (Appeals) restricted the assessee's claim for deduction in relation to such expenditure which was incurred prior to 1-4-2008 on the ground that the approval was granted for two years between 1-4-2008 to 31- 3-2010. Combined reading, of the judgment of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Secretary, DSIR, Ministry of Science and Technology, Govt of India. Further, Rule 6 and 7A of Income Tax Rules, 1962 provides for procedure of approval of R D facility. As per Rule 6 of the Income Tax Rules, 1962, the prescribed authority for expenditure on scientific research and development for the purpose of 35(2AB) of the Act, shall be the Secretary, DSIR. Sub Rule (4) requires the assessee to furnish the application in form 3CK. As per Sub Rule 5A, if the prescribed authority is satisfied the conditions provided in this Rule and in Sub Sec. 2AB of Sec. 35 of the Act, are fulfilled, then the prescribed authority shall pass an order in writing in from No. 3CM. In this case, there is no dispute with regard to fact that the R D facility set up by the assessee was recognised by the competent authority on 19.1.2011. In order to claim the benefit of weighted deduction u/s 35(2AB) of the Act, the assessee should fulfil two conditions. First condition is there should be an in-house research and development facility and such facility should be recognized / approved by the competent authority. The competent authority for this purpose has been defined as the secretary, DSIR, Ministry o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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