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TMI Blog2005 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... on business during the assessment year in question and was entitled for allowance of the expenditure incurred on scientific research which was related to its business – Question is answered in the affirmative, i.e., in favour of the assessee - IT REFERENCE NO. 18 OF 1991 - - - Dated:- 2-2-2005 - Judge(s) : R. K. AGRAWAL., PRAKASH KRISHNA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, justified in allowing the relief on account of depreciation on capital expenditure on the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promotion and development of electronic industry in the State. It claimed deduction of Rs. 19,23,250 under section 35 of the Act which related to the expenditure on scientific research. Out of the aforesaid amount a sum of Rs. 15,83,208 related to the expenditure for the year under consideration and balance related to the earlier years, which were claimed as revenue expenditure, but later on written back. The Assessing Officer examined the books of account and the claim put forward by the respondent/assessee in this respect. According to him relief can be given if the income was assessable under the head "Business and profession" and as the respondent/assessee derived income from other sources, no such expenditure incurred on scientific re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government of India, Department of Science and Technology, and the period of recognition had been extended up to March 31, 1985. Thus it concluded that the respondent/assessee was carrying on the research and development operation. The Tribunal also noticed that the respondent's main source of income was consultancy charges which were recovered for the preparation of feasibility reports for setting up electronic industries in the State and it was for that purpose that such research and development work was carried on in the field of T.V., telecommunications and other electronic components. On these findings the claim put forward by the respondent/assessee was held to be admissible and justified. Heard Sri Shambhu Chopra, learned standin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or expended or related to the business. The term business is to be given a wide meaning and with the rapid advancement and growth in the field of science and technology even the consultancy services offered would be covered under the term business. These days providing consultancy is the major source of revenue and it is not all required to confine the term business to mean only sale and purchase of merchandise or manufacturing activities. It is not in dispute that the respondent/assessee had derived income from consultancy services, preparation of feasibility report and other connected activities. Thus it had carried on business during the assessment year in question and was entitled for allowance of the expenditure incurred on scientific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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