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TMI Blog2018 (5) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... red for allowance u/s. 35(1). With reference to weighted deduction, we have already modified the direction of the CIT(A) in assessee’s appeal. In view of that, ground of Revenue is partially allowed. In nut shell, assessee is entitled to claim uncertified amount at 100% u/s 35(1) and the excess claim of weighted deduction to that extent is to be disallowed. AO is ordered accordingly. Disallowance of 25% amounting on WDV - Held that:- As fairly admitted that the order of CIT(A) is in compliance to the order of the ITAT in earlier year and the matter is pending before the Hon'ble High Court as far as this claim is concerned. Since the order is in compliance to the order of ITAT in earlier year, we do not find any reason to interfere with the direction of CIT(A). In view of that Ground No. 4 is rejected. Claim u/s. 10B - Held that:- The claim of 10B will be considered allowed and the demand if any cannot be claimed from assessee. Since the order of CIT(A) is in tune with the findings of the ITAT in earlier year, there is no need to interfere with the said order. Ground of Revenue on this issue stands rejected. - ITA No. 626/Hyd/16 And ITA No. 659/Hyd/16 - - - Dated:- 9-5-2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant s submissions that the provisions of section 14A cannot be invoked in appellant s case erred in directing the disallowance u/s. 14A to 8.6 lakhs (the amount was wrongly mentioned as ₹ 86 lakhs instead of ₹ 8.6 lakhs for which rectification petition is being filed). 3. The CIT(A) erred in failing to direct AO to allow the deduction of ₹ 24,68,47,978/- claimed u/s. 10B of the Act in respect of Export Oriented Undertaking (hereinafter referred to as EOU) situated at Jeedimetla. 4. The CIT(A) erred in not directing AO to allow the depreciation @25% amounting to ₹ 4,92,188/- on brought forward written down value of ₹ 19,68,750 in respect of non-compete fee of ₹ 40 lakhs paid in Asst. Year 2007-08 to Sudhir Vaid in relation to Concord Biotech Limited . Ground Nos. 1 5 are general in nature. 5. Ground No. 2: AO noticed that assessee has shown an amount of ₹ 176.65 Crores under the head investments as on 31-03-2010. Assessee has not shown any income from the said investments in its accounts and no income has been offered in the computation of income. AO invoked the provisions of Section 14A and asked assessee why the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gton (India) Ltd., Vs. Addl. CIT in TCA No. 520/2016 dt. 26-06-2015 have held that the disallowance u/s. 14A cannot be made where there is no exempt income during the relevant assessment year. Therefore, we set aside the order of Ld.CIT(A) and direct the AO to delete the addition made by him. Ground is allowed. 6. Ground No.3: With reference to this ground, assessee-company has claimed weighted deduction of expenditure u/s. 35(2AB) which worked out to ₹ 65,73,09,000/-. Assessee has filed necessary certificates for claiming the amounts. AO examined and found that DSIR has certified in Form 3CM and 3CL to an extent of ₹ 36,39,46,000/- being R D revenue expenditure and ₹ 7,42,60,000/- being R D capital expenditure. AO issued show cause notice why the balance claim should not be disallowed. Assessee submitted that the expenditure certified is eligible for deduction u/s. 35(2AB) at 150% but the balance expenditure incurred which was not certified is also eligible for deduction u/s. 35(1)/37(1). AO, however, disallowed the claim to an extent of ₹ 1,78,71,547/- u/s. 32(2AB). Ld.CIT(A) following the submissions of assessee, allowed the amount as under: 7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.3. Coming to the ground of Revenue, the issue is pending before the Hon'ble High Court as Revenue is contesting allowance of the balance amount u/s. 35(1) in earlier year. Since Ld.CIT(A) relied on the order of the Coordinate Bench, we do not find any reason to interfere with the direction to allow the amount which was not certified by the DSIR to be considered for allowance u/s. 35(1). With reference to weighted deduction, we have already modified the direction of the CIT(A) in assessee s appeal. In view of that, ground of Revenue is partially allowed. In nut shell, assessee is entitled to claim uncertified amount at 100% u/s 35(1) and the excess claim of weighted deduction to that extent is to be disallowed. AO is ordered accordingly. 7. Ground No.4: This ground pertain to disallowance of 25% amounting to ₹ 4,92,188/- on WDV of ₹ 19,68,750/- in respect of non-competing fee paid in AY. 2007-08 to Mr. Sudhir Vaid. At the outset, it was fairly admitted that the order of CIT(A) is in compliance to the order of the ITAT in earlier year and the matter is pending before the Hon'ble High Court as far as this claim is concerned. Since the order is in complianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Ground No. 4: This ground pertains to deduction of ₹ 1,78,71,547/-. This issue was discussed against Ground No. 4 in assessee s appeal, wherein we have modified the order of CIT(A), directing the AO to allow 100% of the claim u/s. 35(1) and to withdraw 50% claim i.e., weighted deduction to that extent on the un-certified amount. Consequently, the ground is considered partly allowed. 12.1. With reference to the main contention that uncertified amount cannot be allowed, we were informed that the matter is pending before the Hon'ble High Court. However, since Co-ordinate Bench direction in earlier years is in favour of assessee to that extent, there is no merit in Revenue grounds. Accordingly the ground is considered partly allowed. 13. Ground No. 5: This ground pertains to the issue of claim u/s. 10B. Assessee has claimed deduction u/s. 10B to an extent of ₹ 24,68,47,978/- in respect of Export Oriented Undertaking situated at Jeedimetla. The claim was questioned in proceeding u/s. 263 for AY.2005-06 and assessee has filed Writ Petition before the Hon'ble High Court. AO, consistent to the stand taken in earlier years, disallowed the claim. Ld.CIT(A) fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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