TMI Blog2022 (4) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... ll decide the issue as per the report received from DSIR, as per law. Needless to say, that the assessee is free to raise any issue before AO on this particular issue as per law. The AO will not object for non-consideration of issue. Accordingly, this issue of assessee's appeal for assessment year 2016-17 is remanded back to the file of the AO. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- This issue is squarely covered in favour of assessee by the decision of Hon'ble Supreme Court in the case of Chettinad Logistics (P.) Ltd. [ 2018 (7) TMI 567 - SC ORDER] wherein it was held that section 14A cannot be invoked where no exempt income was earned by assessee in relevant assessment year. As the issue is squarely covered in favour of assessee, we delete the disallowance and direct the AO to recompute the income. Accordingly, this issue of assessee's appeal is allowed. Addition made on account of non-reconciliation of income as per Form 26AS and income as offered by assessee - AR stated that the difference was mainly due to deduction of tax deducted at source by the deductor on the amount including service tax. Hence, according to him tax was deducted at source on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for deduction for an amount of ₹ 11,79,85,276/- and accordingly, on the basis of certificate issued by DSIR in Form No. 3CL dated 21.07.2014, the AO restricted the deduction u/s. 35(2AB) of the Act, for an amount of ₹ 11,79,85,276/-. Thereby, the AO disallowed the excess amount claimed by the assessee at ₹ 1,10,54,154/- and added back to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A). 4. The CIT(A) also confirmed the action of AO by stating that However the Assessing Officer is not prevented from optionally acting on the report to 1.7.2016. The distinction deserves to be made. It is normal on the part of the assessee to claim a deduction for which it is not entitled to. The order of the Assessing Officer in reducing the deduction, by acting on the contents of M/s. DSIR report, cannot be assailed. If it is allowed, it would amount to curtailing the discretion of the Assessing Officer. The objections of the assessee are rejected and the restriction of deduction u/s. 35(2AB) by an amount of ₹ 1,10,54,154/- is upheld. The grounds on this issue are rejected. Aggrieved, now assessee is in appeal before the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the Pune Bench are contrary to the amended Rule of the Income Tax Rules, 1962, wherein, the prescribed authority i.e., DSIR was empowered in quantifying the expenditure incurred on in-house research and development facility by the company during the previous year and eligible for weighted deduction under sub-section (2AB) of section 35 of the Act in Part B of Form No. 3CL, when in the case of Electronic Corporation of India Ltd. v. ACIT (supra), the Hyderabad Bench of the Tribunal has observed as under: 17. As per the provisions of sec. 35(2AB) of Act as applicable to the relevant Assessment year, the expenditure incurred by the assessee in any approved in-house research facility, to the extent of approved by the prescribed authority, is entitled to weighted deduction of 150% of such approved expenditure. Therefore, the expenditure as approved by the DSIR in the certificate given by them in Form 3CL alone is to be granted weighted deduction. The DSIR in their certificate has certified expenditure eligible for weighted deduction as ₹ 3,126.02 lakhs. Therefore, it is not for either the assessing authority or the appellate authority to decide on the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision would ordinarily mean that it should be understood in the context in which it is used and there cannot be departure in this regard. The said provision would also indicate that such expenditure as approved by the prescribed authority would be entitled for being allowed as a weighted deduction. There being no dispute to the fact that DSIR being the prescribed authority in the instant case, had issued the report in Form No. 3CL - Annexure - M certifying the total R D expenditure (excluding land and buildings) as prescribed under Section 35(2AB) for a sum of ₹ 4,601.9 lakhs as against the claim of ₹ 5,957 lakhs made by the assessee in the return of income and as such, neither the second respondent nor first respondent could have sat in judgment over the said certificate issued by the prescribed authority. In other words, when the prescribed authority had certified the extent of expenditure which would be allowable, the assessing officer could not have sat in appeal over such certification made by the prescribed authority. The allowability or otherwise of such expenditure cannot be the subject matter of scrutiny by the assessing officer. It would also be required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is out rightly rejected. Thus, the entire claim of weighted deduction claimed by the assessee cannot be acceded to over and above the restriction made by the DSIR. In view of the above facts and circumstances and case law relied on, we are of the considered opinion that the Ld. CIT(A) has rightly directed the Assessing Officer to allow the correct amount of deduction under section 35(2AB) of the Act after taking note of the DSIR certificate dated 16.03.2017. Thus, the ground raised by the assessee stands dismissed. As the issue is fully covered against the assessee and in favour of Revenue by the Co-ordinate Bench of this Tribunal, respectfully following the same, we dismiss this issue of assessee's appeal in assessment year 2012-13. 8. As regards to the issue in assessment year 2016-17, the Ld. AR for the assessee stated that the disallowance of weighted deduction on research development expenditure incurred, both capital and revenue expenditure, due to non-receipt of Form No. 3CL issued by DSIR amounting to ₹ 16,89,81,370/-. The Ld. AR for the assessee stated that in assessee's case inhouse R D facility was approved by DSIR vide Form 3CM dated 21.07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court has deleted the SLP filed by Revenue in the case of CIT v. Chettinad Logistics (P.) Ltd., [2017] 80 taxmann.com 221. 13. We noted that this issue is squarely covered in favour of assessee by the decision of Hon'ble Supreme Court in the case of Chettinad Logistics (P.) Ltd., supra, wherein it was held that section 14A cannot be invoked where no exempt income was earned by assessee in relevant assessment year. As the issue is squarely covered in favour of assessee, we delete the disallowance and direct the AO to recompute the income. Accordingly, this issue of assessee's appeal is allowed. 14. The next issue in this appeal of assessee in ITA No. 542/Chny/2019 for assessment year 2012-13 is as regards to the order of CIT(A) confirming the addition made by AO for an amount of ₹ 16,77,044/- on account of non-reconciliation of income as per Form 26AS and income as offered by assessee. 15. The AO during the course of assessment proceedings noted that there is a difference between income credited as per Form No. 26AS and income offered by assessee in its computation of income. The AO noted that the assessee has not reconciled the figure and hence, he ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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