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TMI Blog2019 (9) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... e of allowance of assessee's claim of deduction under section 35(2AB) of the Income Tax Act, 1961 (for short "the Act"). 3. Brief facts are, the assessee company is engaged in the business of manufacturing and trading of pharmaceutical products. For the assessment year under dispute, the assessee filed its return of income on 29th November 2014, declaring total income of Rs. 17,36,59,140, under the normal provisions of the Act and book profit of Rs. 17,63,04,614, under section 115JB of the Act. In course of the assessment proceedings, the Assessing Officer noticing that the assessee has claimed deduction of Rs. 2,25,14,000, under section 35(2AB) of the Act called upon the assessee to furnish necessary details and also justify the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified/approved an amount of Rs. 97.26 lakh as expenditure incurred for scientific research. Accordingly, he held that assessee is eligible to claim deduction under section 35(2AB) of the Act for an amount of Rs. 1,94,52,000, being 200% of the expenditure approved by the DSIR. Further, he observed, since there is no dispute by the Assessing Officer that the assessee has incurred expenditure of Rs. 1,12,57,000, in research activity, the balance amount of Rs. 15.31 lakh over and above the expenditure approved by the DSIR of Rs. 97.26 lakh, would be allowable to the assessee as business expenditure. Therefore, he restricted the disallowance under section 35(2AB) of the Act to an amount of Rs. 15.31 lakh. However, he directed the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m no.3CL after completion of the assessment proceedings, the assessee furnished it before learned Commissioner (Appeals). Further, he submitted, there cannot be any violation of rule 46A as learned Commissioner (Appeals) has directed the Assessing Officer to allow deduction under section 35(2AB) of the Act after verifying Form no.3CL. As regards expenditure of Rs. 15.31 lakh, the learned Authorised Representative submitted, since the genuineness of such expenditure has not been doubted by the Assessing Officer, assessee is eligible to claim it as deduction as business expenditure, though, deduction claimed under section 35(2AB) of the Act in respect of such expenditure may not be admissible. 7. We have considered rival submissions and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the assessee is eligible to claim deduction under section 35(2AB) of the Act in respect of expenditure approved by the DSIR, however, he has made it clear that such deduction is subject to verification of Form no.3CL by the Assessing Officer. Thus, it is apparent, learned Commissioner (Appeals) has given opportunity to the Assessing Officer to verify Form no.3CL before allowing deduction under section 35(2AB) of the Act. It is relevant to observe, in pursuance to the directions of learned Commissioner (Appeals), the Assessing Officer has not only verified the approval granted in Form no.3CL by the DSIR but having found the expenditure claimed by the assessee to be genuine has allowed deduction under section 35(2AB) of the Act for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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