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2024 (1) TMI 993 - AT - Income TaxDeduction u/s 35(2AB) - approval by DSIR not taken - HELD THAT - As per this section 35(2AB) , deduction is allowable if the assessee satisfied condition as stated in the aforementioned provision. The expenditure which is allowable on scientific research qua in-house, R D facility is approved by the prescribed authority. If the assessee fulfils the conditions as laid in section 35(2AB) of the Act, in that event, deduction of one and half times of such expenditure would be allowable. However, it is brought to our notice that the related issue to the disallowance of impugned expenditure is otherwise, under challenge before the Hon ble High Court of Delhi which is pending adjudication and now fixed for hearing on 06.02.2024. The subject matter pending before Hon ble High Court is also regarding exclusion of R D Centre at Gurgaon. It is observed that substantial disallowance is related to Gurgaon Centre. Since the related issue of approval by DSIR, is pending adjudication before the Hon ble High Court, therefore, for maintaining judicial discipline, we are not expressing our view on the merit of issue, same is kept opened. The AO is hereby directed to re-compute the disallowance after the decision of Hon ble High Court. Hence, this issue is restored to the AO. Accordingly, Ground No.3 raised by the assessee is allowed for statistical purposes. Disallowance of depreciation on goodwill under normal provisions - HELD THAT - As per in assessee s own case in 2023 (2) TMI 1113 - ITAT DELHI taking the consistent view, hereby direct the AO to delete the impugned addition and allow the depreciation on goodwill as claimed by the assessee. Non- allowance of claim of additional depreciation @ 10% made during assessment proceedings - AO did not discuss this claim and Ld.CIT(A) also did not entertain the claim - HELD THAT - Tribunal was pleased to remit the matter back to the AO in the assessee s own case for AY 2014-15 2021 (12) TMI 1428 - ITAT DELHI as held no distinguishing features in the facts of the case in the year under consideration and that of the earlier years has been pointed out by Revenue. Revenue has also not placed any material on record to demonstrate that the ITAT orders in assessee's own case for earlier years has been stayed/ set aside/ overruled by higher judicial forum. We therefore, following the reasoning of the Co-ordinate Bench for A.Y. 2010-11 and for similar reasons set aside the issue back to the file of AO to consider the same on merits after considering the submissions made by assessee and in accordance with law. The AO shall be free to call for such information and explanations as he deems fit to adjudicate the claim of the assessee.
Issues Involved:
1. Disallowance of weighted deduction u/s 35(2AB) 2. Disallowance of depreciation on Goodwill 3. Non-allowance of claim of balance additional depreciation 4. Computation of book profits u/s 115JB 5. Initiation of penalty proceedings u/s 271(1)(c) 6. Charging of interest u/s 234C and 234D Summary of Judgment: Disallowance of weighted deduction u/s 35(2AB): The assessee's claim for weighted deduction u/s 35(2AB) amounting to INR 6,17,97,008/- was disallowed due to short approval by DSIR, mainly on account of delay in filing Form No. 3CK. The Tribunal noted that the statute does not prescribe the receipt of Form No.3CL as a pre-condition for claiming deduction. The Tribunal directed the AO to re-compute the disallowance after the decision of the Hon'ble High Court of Delhi, where a related issue is pending adjudication. Disallowance of depreciation on Goodwill: The assessee claimed depreciation on goodwill of INR 19,15,183/- arising from the acquisition of business units. The Tribunal found that the issue is covered by the decision of the Co-ordinate Bench of the Tribunal in the assessee's own case for previous assessment years. The Tribunal directed the AO to allow the depreciation on goodwill as claimed by the assessee. Non-allowance of claim of balance additional depreciation: The assessee's claim for balance additional depreciation @10% amounting to INR 29,51,16,052/- was not entertained by the AO and Ld. CIT(A). The Tribunal remitted the matter back to the AO to verify the claim and allow it in light of the Tribunal's orders in the assessee's own case for previous years. Computation of book profits u/s 115JB: The Tribunal did not separately adjudicate the issues related to the computation of book profits u/s 115JB, as they were either general in nature, not pressed, or consequential. Initiation of penalty proceedings u/s 271(1)(c): The Tribunal dismissed the ground related to the initiation of penalty proceedings as premature. Charging of interest u/s 234C and 234D: The Tribunal dismissed the ground related to the charging of interest u/s 234C and 234D as consequential and requiring no separate adjudication. Conclusion: The appeal of the assessee was partly allowed for statistical purposes, with specific directions to the AO to re-compute disallowances and verify claims as per the Tribunal's findings and pending adjudications.
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