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2021 (2) TMI 848 - ITAT MUMBAIDisallowance u/s 14A r.w.r. 8D - HELD THAT:- As decided in own case [2019 (10) TMI 987 - ITAT MUMBAI] if there is no exempt income there cannot be any disallowance. Respectfully following the said decision, we direct the Assessing Officer to delete the disallowance made u/s. 14A of the Act. Ground raised by the assessee is allowed. Upward adjust of interest on Share Application Money to RLSI and RLSBV through which share capital was subscribed - HELD THAT:- As decided in own case [2019 (10) TMI 987 - ITAT MUMBAI] revenue has raised grounds on upward adjustment of interest on optionally convertible loan given to its subsidiaries, the coordinate bench in assessee’s own case for AY 2009-10 and AY 2010-11 adjudicated in favour of the assessee, when the loan was subsequently converted into share capital, the interest adjustment cannot be made. Hence, These issues are settled in favour of the assessee. Disallowance of weighted deduction u/s 35(2AB) due to short approval in Form 3CL - HELD THAT:- Looking into the provisions of rules, it stipulates the filing of audit report before the prescribed authority by the persons availing the deduction under section 35(2AB) of the Act but the provisions of the Act do not prescribe any methodology of approval to be granted by the prescribed authority vis-à-vis expenditure from year to year. The amendment brought in by the IT (Tenth Amendment) Rules w.e.f. 01.07.2016, wherein separate part has been inserted for certifying the amount of expenditure from year to year and the amended form No.3CL thus, lays down the procedure to be followed by the prescribed authority. Prior to the aforesaid amendment in 2016, no such procedure / methodology was prescribed. In the absence of the same, there is no merit in the order of Assessing Officer in curtailing the expenditure and consequent weighted deduction claim under section 35(2AB) on the surmise that prescribed authority has only approved part of expenditure in form No.3CL. We find no merit in the said order of authorities below. Courts have held that for deduction under section 35(2AB) of the Act, first step was the recognition of facility by the prescribed authority and entering an agreement between the facility and the prescribed authority. Once such an agreement has been executed, under which recognition has been given to the facility, then thereafter the role of Assessing Officer is to look into and allow the expenditure incurred on in-house R&D facility as weighted deduction under section 35(2AB) - We reverse the order of Assessing Officer in curtailing the deduction claimed under section 35(2AB).
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