TMI Blog2023 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and development facility. However, the prescribed authority approved this expenditure by incorporating the same in form 3CL. We, therefore, respectfully following the decision of Cadila Healthcare Ltd. [ 2013 (3) TMI 539 - GUJARAT HIGH COURT] and followed by the Co-ordinate Benches of the Tribunal, consistently, hold the issue in favour of the assessee and direct the learned Assessing Officer to delete the addition made on this account. Decided in favour of assessee. Foreign Tax Credit (FTC) - Claim denied on the ground that Form 67 shall be furnished on or before the due date specified for furnishing of the return of income under section 139(1) of the Act and on furnishing the documents specified in Form 67 - case of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the Foreign Tax Credit (FTC), which was denied on the ground that Form 67 shall be furnished on or before the due date specified for furnishing of the return of income under section 139(1) of the Act and on furnishing the documents specified in Form 67. 3. Insofar as the first issue is concerned, contention of the assessee is that the bio equivalence and clinical study cannot be performed within the approved facility and, therefore, when once the expenditure relating to bio and clinical study expenses incurred outside approved facility are included in form 3CL and establish that such an expenditure is incurred in relation to the research in the approved facility, the same cannot be denied. Learned AR placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for deduction to a company engaged in business of bio-technology or in the business of manufacture or production of any article or thing notified by the Board towards expenditure of scientific research development facility approved by the prescribed authority. Such deduction at the relevant time was one and a half times expenditure which has now been increased to twice the eligible expenditure. We may notice that Explanation to s. 35(2AB)(1) which was introduced by the Finance Act, 2001 w.e.f. 1st April, 2002 reads as under: Explanation.-For the purposes of this clause, 'expenditure on scientific research in relation to drugs and pharmaceuticals', shall include expenditure incurred on clinical drug trial, obtaining approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 35 and on the other, making the Explanation noted above quite meaningless. We have noticed that for the purpose of the said clause in relation to drugs and pharmaceuticals, the expenditure on scientific research has to include the expenditure incurred on clinical trials, in obtaining approvals from any requlatory authority or in filing an application for grant of patent. The activities of obtaining approval of the authority and filing of an application for patent necessarily shall have to be outside the in-house research facility. Thus, the restricted meaning suggested by the Revenue would completely make the Explanation quite meaningless. For the scientific research in relation to drugs and pharmaceuticals made for its own peculiar req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Co-ordinate Benches of the Tribunal in a number of cases. This decision is applicable to the facts of the case on all fours since the activities of bio equivalence and clinical study cannot be carried out only in the laboratory of the pharmaceutical company and they have to be necessarily carried out outside the research and development facility. However, the prescribed authority approved this expenditure by incorporating the same in form 3CL. 8. We, therefore, respectfully following the decision of the Hon'ble Gurajat High Court (supra) and followed by the Co-ordinate Benches of the Tribunal, consistently, hold the issue in favour of the assessee and direct the learned Assessing Officer to delete the addition made on this accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his requirement cannot be treated as mandatory, rather it is directory in nature. This is because, Rule 128(9) does not provide for disallowance of FTC in case of delay in filing Form No.67. This view is fortified by the decision of coordinate bench of this Tribunal in case of Ms.Brinda Kumar Krishna vs. ITO in ITA no.454/Bang/2021 by order dated 17/11/2021 . 12. A Co-ordinate Bench of this Tribunal in the cases of Shridhar Madhav Diwan vs. DCIT in ITA No. 102/Hyd/2023, dated 24/05/2023 and Purushothama Reddy Vankireddy vs. ADIT in ITA No. 526/Hyd/2022, dated 05/12/2022, followed the same and held the issue in favour of the assessee. These decisions are applicable to the facts of the case and while respectfully following the said view, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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