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TMI Blog2008 (8) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... e incurred before February 27, 2001 - approval letter by a note, it was mentioned that the facility approved for the purpose of section 35AB(2) - Held that: - entire expenditure incurred by the assessee on development of facility, if approved, has to be allowed for the purpose of weighted deduction - assessee is entitled to claim weighted deduction in respect of the entire expenditure incurred under section 35AB(2) of the Act by the assessee - Appeal is dismissed X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals), who upheld the action of the Assessing Officer. Being further aggrieved by the order of the Commissioner of Income-tax (Appeals), the assessee took up the matter before the Tribunal. The Tribunal adjudicated the whole issue and held that this section has been introduced with a view to encourage research and development in the industrial sector and nowhere is it men-tioned that research and development facility is to be approved from a particular date. In other words, it is nowhere suggested that the expenses would be allowable as deduction only from the date of approval or only from a cut-off date, expenses incurred can be claimed as deduction. The Tribunal has further held that once the facility is approved, the entire expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds used are any expenditure incurred by the assessee on scientific research on the in-house research and development facility approved by the prescribed authorities has to be allowed by deduction of expenditure so incurred. The meaning of these words is plain and clear that the facility is to be established first and on approval of the facility all the expenditure so incurred by the assessee for development of in-house facility is to be held as eligible for weighted deduction. Form No. 3CM, which is the order of approval as provided by the Rules in this behalf also does not have any mention of the date of approval rather it speaks only of approval. The lower authorities are read-ing more than what is provided by law. A plain and simple rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M and come to the that a plain and harmonious reading of the rule and Form clearly suggests that once the facility is approved, the entire expenditure so incurred on development of the research and development facility has to be allowed for weighted deduction as provided by section 35AB(2). The Tribunal has also considered the legislative intention behind the above enactment and observed that to boost the research and development faci-lity in India, the Legislature has provided this provision to encourage the development of the facility by providing deduction of weighted expendi-ture. Since what is stated to be promoted was development of facility, the intention of the Legislature by making the above amendment is very clear that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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