2020 (12) TMI 1154 - AT - Income Tax

Deduction u/s 35(2AB) - expenses on in-house R D (being the 200% of R D expenditure) - HELD THAT - CIT(A) has allowed the claim of the assessee on the basis of decision of Meco Instruments Pvt. Ltd. 2010 (8) TMI 484 - ITAT, MUMBAI - In this case also, the expenses incurred on in-house R D was allowed. The expenses incurred for in-house R D unit of appellant company are supported by bill and vouchers and duly verified by the AO. The facts are not distinguishable at this stage. There is nothing on record to which it can be assumed that the law settled in Meco Instruments Pvt. Ltd. (supra) has been changed or varied, therefore, in the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue.

Summary

Issues:
- Appeal against CIT(A) order allowing relief on weighted deduction u/s 35(2AB) for A.Ys. 2011-12, 2012-13 & 2013-14.

Detailed Analysis:

1. ITA. NO.5679/M/2017:
- Background: Revenue appealed CIT(A) order allowing weighted deduction u/s 35(2AB) for A.Y. 2011-12.
- Facts: Assessee claimed deduction for in-house R&D expenses, which was partially disallowed by AO.
- CIT(A) Decision: CIT(A) allowed the claim based on Meco Instruments Pvt. Ltd. judgment.
- Arguments: Revenue argued against CIT(A) decision, while Assessee relied on CIT(A) order.
- Judgment: ITAT upheld CIT(A) decision, stating facts were identical to Meco Instruments case, and law not changed.

2. ITA. NO.5680 & 5681/M/2017:
- Similarity: Facts similar to ITA. NO.5679/M/2017, with different figures.
- Decision: ITAT dismissed revenue's appeals based on the reasoning in ITA. NO.5679/M/2017.

Conclusion:
The ITAT Mumbai dismissed the revenue's appeals in all three cases, upholding the CIT(A) orders allowing the weighted deduction u/s 35(2AB) based on the Meco Instruments Pvt. Ltd. judgment. The tribunal found the facts to be identical, and the law unchanged, leading to a favorable decision for the assessee.