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TMI Blog2010 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner also submitted that the said weighted tax deduction could be claimed on all expenditure on the in-house Research and Development facility and should not have been limited only to the capital expenditure on the research and development equipment for the financial year 2007-08. - held that - in view of the guideline prescribed in clause (vi) of para 6, a beneficial provision has been made so as to extend the approval of an in-house research and development centre to the previous year, but limited only to capital expenditure (excluding any capital expenditure on land and buildings) – capital expenditures allowed from 2007-08 onwards – revenue expenditures allowed from the financial year 2008-09 i.e. the year in which agreement was entered into. - 13338/2009 - - - Dated:- 20-4-2010 - Respondent Advocates who appeared in this case:- For the Appellant: Mr T.N. Chopra with Mr Shivendra Kumar For the Respondent: Mr A.S. Chandhiok, ASG with Mr Atul Batra CORAM:- Hon'ble Mr Justice Badar Durrez Ahmed Hon'ble Mr Justice Manmohan Singh 1. Whether Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a letter dated 17.09.2001, upon an application for renewal of recognition of the petitioner's in-house Research and Development units at Perambra, Distt-Trichur beyond 31.03.2001 as also recognition of the Research and Development Centre at Limda village, Distt-Baroda (Gujarat), the Government of India through the Ministry of Science and Technology informed the petitioner that it had been decided to accord renewal of the recognition of the in-house Research and Development unit at Perambra as also to grant recognition of the in-house Research and Development unit at village Limda upto 31.03.2004. Thereafter, upon a similar renewal of the recognition of the in-house Research and Development units being sought, the Government of India, Ministry of Science and Technology, by its letter dated 15.04.2004 conveyed its decision of according renewal of recognition to the in-house Research and Development units of the petitioner at Perambra as well as at village Limda upto 31.03.2007. A similar renewal was also granted to the petitioner by virtue of the letter dated 31.05.2007 issued by the Government of India, Ministry of Science and Technology upto the period 31.03.2010. On 21.08.2008, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id rule and in sub-section (2AB) of Section 35 of the said Act are fulfilled, pass an order in writing in Form 3CM. Consequent upon the application made by the petitioner on 21.08.2008, alongwith the application in Form 3CK and the agreement, which is comprised in Part "B" thereof, the prescribed authority passed the impugned order dated 15.06.2009 in Form 3CM. The operative portion of the order reads as under:- "The above Research Development facility is approved for the purpose of section 35(2AB) from 01.04.2007 to 31.03.2010, subject to the conditions underlined therein (approval for the financial year 2007-08 is recommended only for the purpose of claiming weighted tax deduction on capital expenditure on R D equipment)." 5. A plain reading of the operative portion of the impugned order indicates that the research and development facility at Limda has been approved for the purposes of Section 35(2AB) from 01.04.2007 to 31.03.2010. However, such approval is subject to the condition underlined therein as also to the condition that approval for the financial year 2007-08 is recommended only for the purposes of claiming weighted tax deduction on capital expenditure on R D equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid recognition by the Department of Scientific and Industrial Research, would, as a normal rule, be considered from the first of April of the year in which the application is made in Form 3CK. He submitted that in the present case, the application in Form 3CK was made on 21.08.2008 and, therefore, in terms of these guidelines, the approval would normally have been granted from 01.04.2008. However, in view of the guideline prescribed in clause (vi) of para 6, a beneficial provision has been made so as to extend the approval of an in-house research and development centre to the previous year, but limited only to capital expenditure (excluding any capital expenditure on land and buildings). It is for this reason, according to Mr Chandhiok, that the approval in Form 3CM granted on 15.06.2009 has been given with effectfrom 01.04.2007. It was also pointed out that it is because of these provisions, which are beneficial to the petitioner, that the benefit of weighted tax deduction for the year 2007-08, which is the year prior to the year of application, has been limited to capital expenditure (excluding expenditure on land and building). However, for the period subsequent to 01.04.2008, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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