TMI Blog2023 (1) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the recognition of R D facilities is separate and distinct from approval of R D facilities for the purpose of deduction u/s 35(2AB) of the Act. Therefore, the order of the ld. CIT(A) is perverse and passed in perfunctory manner. In the circumstances, we set-aside the order of the ld. CIT(A) and restore the order of the Assessing Officer. Thus, the ground of appeal filed by the Revenue stands allowed. - ITA Nos.1628 And 1629/PUN/2018 And ITA Nos.1353 to 1356/PUN/2019 - - - Dated:- 19-1-2023 - Shri Inturi Rama Rao, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Revenue : Shri Abhinay Kumbhar For the Assessee : Shri Nikhil S. Pathak ORDER PER INTURI RAMA RAO, A M: These are the appeals filed by the Revenue directed against the separate orders of the ld. Commissioner of Income Tax (Appeals)-1, Aurangabad [ the CIT(A) ] dated 02.07.2018 for the assessment years 2014-15 2015-16 and dated 10.07.2019 for the assessment years 2010-11 to 2012-13 respectively. 2. Since the identical facts and common issues are involved in all the above captioned six appeals of the Revenue, we proceed to dispose of the same by this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D), Circle-1, Aurangabad ( the Assessing Officer ) vide order dated 22.06.2018 denying the claim for weighted deduction u/s 35(2AB) at Rs.8,57,32,775/- for want of requisite approval u/s 35(2AB) of the Act. However, the Assessing Officer had allowed the expenditure incurred on Research and Development (R D) as revenue expenditure . 6. Being aggrieved by the above order of assessment, an appeal was filed before the ld. CIT(A) who vide impugned order allowed the claim of weighted deduction u/s 35(2AB) on the ground that the recognition obtained by the respondent-assessee is good enough for allowing the weighted deduction u/s 35(2AB) of the Act. The ld. CIT(A) also placed reliance on the decision of the Co-ordinate Bench of this Tribunal in the case of Minilec India (P.) Ltd. vs. ACIT in ITA No.690/PUN/2015 order dated 09.04.2018 and Nath Bio Genes (India) Ltd. vs. ACIT in ITA No.367/PUN/2012 order dated 27.01.2014. The ld. CIT(A) while allowing the appeal had followed his own orders for the assessment year 2014-15 in appeal no.ABD/CIT(A)-1/363/2016-17, wherein, the following findings were recorded by the ld. CIT(A) :- With regard to the scientific research, the appellant com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not disentitle the assessee to claim of deduction u/s 35(2AB) of the Act. In this regard, he placed reliance on the decision of the Hon ble Delhi High Court in the case of CIT vs. Sandan Vikas (India) Ltd., 22 taxmann.com 19 (Delhi) and Maruti Suzuki India Ltd. vs. Union of India, 84 taxmann.com 45 (Delhi). Without prejudice to the above, it is submitted that once the approval is granted by DSIR for the purpose of claiming deduction u/s 35(2AB), there was no requirement under the law to seek extension of such approval and Form No.3CM does not prescribe any period of validity, once approval is given, it is valid for ever. Finally, it is submitted that the exemption provision should be interpreted liberally placing reliance on the decision of the Hon ble Supreme Court in the case of Bajaj Tempo Ltd. vs. CIT, 62 Taxman 480 (SC). 10. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to whether the respondent-assessee is entitled for deduction u/s 35(2AB) of the Act in respect of expenditure incurred on R D under the provisions of section 35(2AB) of the Act or not?. For better appreciation, the provisions of section 35(2A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee would be entitled for weighted deduction u/s 35(2AB) on account of (i) expenditure incurred on R D, (ii) subject to the requisite approval of such facilities by prescribed authorities i.e. DSIR and (iii) the respondent-assessee would be entitled for weighted deduction on the expenditure so incurred. In the present case, no doubt, expenditure had been incurred on R D, but the requisite approval u/s 35(2AB) was not obtained from the prescribed authorities, as evident from the assessment order. The approval originally granted was valid upto 31.03.2009 only. No doubt, the respondent-assessee company had filed an application for seeking the extension of such approval. Such extension was denied by the prescribed authorities on account of fact that the respondent-assessee company had not adhered to the prescribed conditions. This denial of extension was communicated to the Assessing Officer by the prescribed authorities vide his letter dated 20.01.2017. If the respondent-assessee is aggrieved by the denial of extension of approval u/s 35(2AB), the only course of action available to the respondent-assessee is to invoke writ jurisdiction of the Hon ble High Court. Thus, the material on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions. Similarly, the decision of the Hon ble Gujarat High Court in the case of CIT vs. Claris Lifesciences Ltd., 174 Taxman 130 (Gujarat) only laid down that section 35(2AB) nowhere suggests that the date of approval of R D facilities would be cut off date of eligibility of weighted deduction in respect of expenses incurred from that date onwards. Whereas the entire expenditure incurred on R D has to be allowed as weighted deduction. The ratio of the said decision of the Hon ble Gujarat High Court (supra) has no application to the facts of the present case. As admittedly, there was no requisite approval u/s 35(2AB), the decision of the Co-ordinate Bench of the Bombay Tribunal in the case of ACIT vs. Meco Instruments (P.) Ltd., 7 taxmann.com 24 (Mumbai Trib.) and in the case of Advance Enzyme Technologies (P.) Ltd. vs. ACIT, 116 taxmann.com 498 (Mumbai - Trib.) have no application to the facts of the present case. In those cases, admittedly, the requisite approval in Form No.3CM was obtained by the assessee for the relevant assessment year. The ld. CIT(A) had fell in serious error in allowing the deduction u/s 35(2AB) in the absence of requisite approval u/s 35(2AB) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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