TMI Blog2010 (10) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged in the business of manufacturing and sale of drugs intermediates, specially chemicals and bulk drugs. It also does Research ana Development of chemical drugs. 3. The appellant-filed the return of income on 25.01.2004 declaring an income of ₹ 2,13,38,890/- for the asst. year 2002-02. The assessee also filed an audit report under Section 44AB on 31.10.2008 i.e., within the due date. The return was processed. Subsequently, the case was selected for scrutiny and notice under Section 142(1) and 143(3) of the Income Tax Act 1961 (hereinafter referred to as Act' for short} was issued on 17.11.2004. 4. On such assessment, the Assessing Officer assessed the total income at ₹ 15,75,63,971/- as against the returned income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its financial statement as also certified in their audit report. In fact it is only a sum of ₹ 3,24,46,250/- which is accounted for the computation of the business income and claim of expenditure of scientific research is not in accordance with the provisions of Act. The assessee had not fortified its claim for such expenditure in accordance of the provisions of the I.T. Act having subjected to audit under Section 44AB, which would have been available to the assessee before hand irrespective of a survey carried out under the provisions of Section 133A by the Assessing Officer after taking up scrutinizing the assessee return under the provision of Section 143(3) Therefore, they held that the assessee was not entitled for R D capital e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The order of the Tribunal on the face of it is perverse. It is a fit case for setting aside the order and remanding back for fresh disposal in accordance with law. In which event, it is not necessary for him to urge the grounds on merits and consequently not necessary for this Court to decide the appeal on merits. 10. Per contra, the learned counsel for the Revenue supported the impugned order. 11. The subject matter of this proceeding is regarding the disallowance of the capital expenditure under Section 35(2)(ia) of the Act. incurred for the purpose of R D activities carried on by the company in a sum of ₹ 10,13,29,425/-. Secondly, disallowance of revenue expenditure claimed under Section 35(1)(i) of the I.T. Act 1961 incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity of having a say about this discriminating material, the Assessing Officer proceeded to pass the assessment order. 15. It is in this context the Appellate Authority found fault with the Assessing Officer in not affording an opportunity to the assessee and passing. the order. However, the Appellate Authority carefully examined the entire material on record and came to the conclusion that the findings recorded by the Assessing Officer is not based on any legal evidence and therefore he aside the findings and gave benefit to the assessee. 16, When this was challenged by the Revenue before the Tribunal, the Tribunal was required to go into the correctness of the reasoning given by the assessee, in the light of the material availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts employees which is ex-facie contrary to the material on record. In fact, that was not the case of the revenue. Similarly without any reasoning it has set-aside the order of the Commissioner (Appeals) which has allowed the depreciation except to the extent of ₹ 1,56,470/-. Therefore. it is obvious the Tribunal has not properly applied its mind to rival contentions urged before it and the material with the Appellate. Authority. were not looked into before granting the benefit to the assessee. 17. In fact, the order of the Appellate Authority which runs to roughly 80 pages refers to each and every document invoices. receipts, cheque payments, the name of the persons to whom the said payments are made. It is only thereafter the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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