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TMI Blog2020 (1) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been appreciated that when research was helpful for other units, the question of apportionment of the expenditure to the Pondicherry unit would not arise. This fact can also be ascertained from the books of accounts of the Pondicherry unit. Thus, if the product is manufactured by other unit of the appellant, then only allocation of research and development expenses to the other unit is justified. Therefore, the first substantial question of law framed is answered in favour of the assessee and against the revenue. Deduction u/s 35(1) - tribunal justification in not excluding the capital expenditure from the total R D expenditure of ₹ 1.99 crores while allowing the expenditure on R D between the other units - HELD THAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court, the revenue shall be at liberty to take an action against the appellant, if so advised in accordance with law. - I.T.A. NO.101 OF 2010 - - - Dated:- 8-1-2020 - THE HON BLE MR. JUSTICE ALOK ARADHE AND THE HON BLE MR. JUSTICE RAVI V. HOSMANI APPELLANT: SRI. S. PARTHASARATHI, ADV. RESPONDENT: SRI. K.V. ARAVIND, ADV. JUDGMENT Mr. S. Parthasarathi, learned counsel for the appellant. Mr. K.V. Aravind, learned counsel for the respondent. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act , for short) has been filed by the assessee which was admitted by a Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer by an order dated 23.12.2003 allowed the claim of the appellant. Being aggrieved, an appeal was preferred. The Commissioner of Income Tax (Appeals) by an order dated 10.03.2006 remitted the matter to the Assessing Officer with a direction to carry out the assessment afresh. The Assessing Officer by an order dated 11.02.2008 reduced the profit on which the relief under Section 80-IB was given and only net balance of profit was considered for allowing the relief under Section 80HHC. 4. Being aggrieved by the order of Assessing Officer, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals), which was partly allowed by an order dated 11.02.2008. An appeal was preferred before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in favour of assessee subject to the outcome of the special leave petition pending before the Supreme Court. It was further submitted that it has been conceded by the appellant that in the Pondicherry unit infact two products were produced by research and development unit in the subsequent year, though they were developed in the preceding year. 7. We have considered the submissions made by the learned counsel for the parties and have perused the record. From the perusal of the record, it is evident that two products namely DIANOUM/RETARD tablets and NOVOLID tablets were manufactured by the Pondicherry unit not in the relevant year, for which research was done by research and development unit during the relevant year a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial question of law is answered in favour of the assessee and against the revenue. 9. Sofar as third and fourth substantial questions of law are concerned, the same are answered in favour of the assessee subject to the decision of the issue involved in the aforesaid substantial questions of law which is pending adjudication before the Supreme Court. Needless to state that depending on the view taken by the Supreme Court, the revenue shall be at liberty to take an action against the appellant, if so advised in accordance with law. 10. In view of preceding analysis, the impugned order dated 30.10.2009 passed by the Income Tax Appellate Tribunal is hereby quashed. Accordingly, the appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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