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TMI Blog2019 (10) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that, even otherwise also, no addition can be made u/s 14A in computation of book profit u/s 115JB of the Act. The Hon ble Delhi High Court in Pr. CIT Vs. M/s. Bhushan Steel Limited and others [ 2015 (9) TMI 1424 - DELHI HIGH COURT] has held that no disallowance can be made u/s.14A in computation of income u/s.115JB. Similar view has been reiterated by the Special Bench of the Tribunal in ACIT Vs. Vireet Investments (P) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] . We, therefore, hold that neither the disallowance can be made u/s.14A nor any addition on this score can be made in the computation of income u/s.115JB of the Act. Disallowance of weighted deduction u/s.35(2AB ) - AO disallowed the deduction of such R D expenses - HELD THAT:- Having heard both the sides and gone through the relevant material on record, it is noted that section 35(2AB), at the material time, provided for weighted deduction on the basis of report to be submitted in Form 3CL read with Rule 6 of the Income-tax Rules. Clause (b) of Rule 6(7A), at the relevant time provided that: The prescribed authority shall submit its report in relation to the approval of in-house Research and Development facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the AO that the assessee did not fulfill all other relevant conditions, we hold that it is entitled to weighted deduction for the full amount of the expenditure incurred on Research and Development irrespective of the fact that a part of the amount so incurred was not approved by the DSIR. - ITA Nos. 1271 & 1272/PUN/2018 - - - Dated:- 18-10-2019 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri Kishor Phadke For the Respondent : Shri Jeevan Bachhav, DCIT ORDER PER BENCH : These two appeals by the assessee relate to the assessment years 2013-14 2014-15. Since common issues are raised in these appeals, we are, therefore, proceedings to dispose them off by this consolidated order for the sake of convenience. A.Y. 2013-14 : 2. The first ground raised in this appeal is against the confirmation of addition of ₹ 49,95,140/- made by the Assessing Officer (AO) under section 14A of the Income-tax Act, 1961 read with Rule 8D of the Income-tax Rules, 1962. 3. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 640 (SC) has held in para 41 that: before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance u/s.14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting the said apportionment. In that eventuality, it will have to record its satisfaction to this effect . In view of the above proposition laid down by the Hon ble Supreme Court, it is evident that where the assessee has itself offered some disallowance with which the AO is not satisfied, it becomes incumbent upon him to record satisfaction, before embarking upon the disallowance as per rule 8D of the I.T. Rules, as to how the apportionment made by the assessee was not correct. We are confronted with a situation in which the assessee suo moto offered a disallowance of ₹ 10.00 lakh. The AO without recording any such satisfaction about the incorrectness of the apportionment made by the AO, simply proceeded to compute the disallowance under Rule 8D(2). When we consider the factual panorama prevailing in the instant case in juxtaposition to the mandate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d authority shall submit its report in relation to the approval of in-house Research and Development facility in Form 3CL to the Director General (Income Tax Exemptions) within sixty days of its granting approval . An amendment was carried out to clause (b) of Rule 6(7A) w.e.f. 01-07-2016 providing that The prescribed authority shall furnish electronically its report,- (i) in relation to the approval of in-house Research and Development facility in Part A of Form No. 3CL; (ii) quantifying the expenditure incurred on in-house research and development facility by the company during the previous year and eligible for weighted deduction under sub-section (2AB) of section 35 of the Act in Part B of Form No. 3CL . Simultaneous with the amendment in Rule 6(7B), an amendment was also made to Form 3CL. Whereas the earlier Form, being, the Report to be submitted by the prescribed authority to the Director General (IT Exemptions) u/s.35(2AB), talked of recognition granted by DSIR to the in-house Research and Development Centre of the company, the amended Form 3CL, pursuant to amendment in Rule 6(7A)(b), bifurcated the report into two parts, namely, Part-A containing one-time recognition b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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