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2013 (9) TMI 882 - ALLAHABAD HIGH COURTAllowability of Research and Development expenditure - CIT(A) observed that expenses can be allowed u/s 35D in three installments – Held that:- Section 35-D has no application on the facts of the present case. The assessing officer has not recorded any finding based on any material whatsoever in support of his observation as to applicability of Section 35D of the Act. Regarding allow-ability of 1/3 of the total expenditure - held that:- Expenditure incurred by the assessee was of revenue nature. As per provision of Section 37 of the Act, any expenditure not being expenditure of the nature described under Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly or exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head of "profits and gains of business or profession - Once a finding of fact has been recorded that the expenditure is of revenue nature and has been spent wholly and exclusively for the purposes of the business, the same is allowable expenditure and has to be deducted while computing the total income. Reliance has been placed upon the judgment in the case of Kedarnath Jute Mfg. Co. Ltd. Vs. The Commissioner of Income Tax ( Central) Calcutta [1971 (8) TMI 10 - SUPREME Court], wherein it has been held that Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter - Entire expenditure incurred by the assessee being revenue in nature was allowable and the assessee was entitled to claim the entire expenditure as deduction – Decided against the Revenue.
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