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TMI Blog2013 (12) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... scientific research without appreciating the fact that the assessee was not carrying out any research and development activity and also had not filed certificate from the prescribed authorities. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance u/s. 14A to Rs.1,00,000/- and therefore, allowing relief of Rs.1,58,196/- without furnishing any basis for the same." 2. The brief facts of the case are that the assessee, a hardware and networking institute, in its return of income claimed deduction u/s. 35(1)(iv) of the Income Tax Act in respect of capital expenditure incurred on scientific research. The capital expenditure was shown to be incurred on purchase of bui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Udyog Bhavan, T.J.Road, Sewri (W), Mumbai- 400 015. At the premises, I found 6 class rooms complete with a white board and 11 computer systems with SMPS detectors and tables and chairs. I was shown around the classrooms. In one of the classrooms the lectures were being conducted. Shri Guruprasad Shenai, the incharge and Shri Debasis Das explained to me how the courses and teaching methodology was developed. Spot enquiries reveal the assessee is a Computer Hardware & Networking Institute teaching the students through courses developed in-house. I found no specific lab or a room which can be called a lab." From the report, the AO came to the conclusion that the assessee was a teaching institute and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er hand, the submission of the learned AR is that no research activity is carried out at Mumbai office however, research and development activity is being carried out at flat nos. 605, 607 and 608 at Delhi office. The learned AR has relied upon the detailed order of the learned CIT(A) vide which, the learned CIT(A) tried to define and elaborate the various aspects of the term 'research and development activity'. The learned AR has also relied upon various documents and literature to show that the research and development activity was actually carried out by the assessee. He further submitted that the research and development activity is being carried out to devise methodologies to better train students. The objective of the research was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fun faster and easier. * A Faculty guide which has helped standardizing the training methodology across the country. * Courseware that is easier to understand than most of the books written by experts. * The learned AR has further relied upon the documents which were submitted before the learned CIT(A) to show the objective, purpose and the results of the research and development activity carried on by the assessee. (ii) Admittedly, no such evidences were produced before the AO by the assessee. However, the ld. CIT(A) without referring the matter back to the AO to verify the claims of the assessee in this respect and without giving any opportunity to the AO to rebut the claim of the assessee delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: Particulars Amount (Rs.) Interest on Territory Reservation Deposit paid to Franchisees 4,29,051 Interest on Service Tax 79,155 Total 5,08,206 From the above it can be observed that the interest expenditure is not at all related to any borrowing or investment in shares and mutual funds. 3.3 It is further submitted that in the case of Godrej & Boyce Mfg. Co. Ltd 328 ITR 81, Hon'ble Bombay High Court held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable but can be applied only if assessee's method is not satisfactory. Also, Rule 8D is not retrospective and applies from AY 2008-09. 3.4 I have considered the above submission of the appellant. It is seen that the AO has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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