9911796707
TMI Blog2012 (10) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to file details in respect of research and development activities undertaken by the assessee. In response to that, the assessee submitted his reply stating that imported products were analyzed for design, structure and material composition and the same was used to improve the components in the products manufactured by the company. The products imported were unique in nature and not resalable and the products were completely stripped and broken for analysis and had no further resale value. Pumps imported were of different types in single units and were not of commercial nature. The expenditure incurred by the assessee was for investigation and research in nature and hence allowable as Revenue expenditure. 3. The Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no evidence to such knowledge having been used in innovating its products. Hence, the Assessing Officer came to a conclusion that the expenditure on this score cannot be considered as incurred totally and exclusively for the purpose of assessee's business to be eligible for deduction u/s 37 of the Act. On being aggrieved, the assessee carried the matter in appeal before the Tribunal. 4. Before the ld. Commissioner of Income-tax(Appeals), the ld. counsel for the assessee submitted that imported products were analyzed for design, structure and material composition and the same was used to improve the components in the products manufactured by the company. The products imported were unique in nature and not resalable and the products we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were dismantled to test the quality of the material and other parameters which helps the assessee for improving the quality of its products and design so as to compete with the competitions in the market. The ld. Commissioner of Income-tax(Appeals), after considering the decision of the Hon'ble Kerala High Court, directed the Assessing Officer to allow the said expenditure while computing the total income. Aggrieved, the Revenue carried the matter in appeal before the Tribunal. 6. Before us, the ld. counsel for the Revenue relied on the order of the Assessing Officer and submitted that the importing of pumps and motors for research and development are not connected to assessee's business and therefore, the assessee is not eligible for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record. The only issue for our consideration is whether the assessee is entitled for deduction of the expenditure incurred for the purpose of the business under section 37 of the Income-tax Act, 1961, or not. The case of the assessee is that it has incurred expenses on research and development amounting to Rs. 32,34,015/-. The same was disallowed by the Assessing Officer by holding that the said expenditure is not in the nature of research and development expenditure. We find from the order of the Assessing Officer that when the Assessing Officer asked for the details of the research and development expenditure, the assessee has not given any details. It was submitted before the Assessing Officer that the assessee has incurred thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
