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TMI Blog2021 (1) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... nditures are incurred by assessee on scientific research and related to business, within the meaning of section 43(4) - HELD THAT:- We note that facts and issue considered by this Tribunal in assessment year 2005-06 . [ 2016 (6) TMI 1407 - ITAT BANGALORE ] are same with the year under consideration. Therefore, respectfully following the view taken by this Tribunal in assessment year 2005-06 in assessee's own case, we remand this issue to Ld. CIT(A). Ld. CIT(A) is directed verify whether, assessee acquires any copyright/ownership in respect of products sold developed. Ld. CIT(A) is directed to decide the issue based on documents/evidences filed by assessee in light of decision in case of Talisma Corporation Pvt. Ltd. [ 2013 (12) TMI 1419 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's case was selected for scrutiny and notices under section 143(2) of the Act and 143(1) of the Act was issued in response to which representative of assessee appeared before Ld. AO and filed requisite details. 3. Ld. AO noted that assessee incurred expenses of ₹ 26,79,33,501/- relating to product development which was capitalised along with opening work in progress amounting to ₹ 99,523/-, totalling to ₹ 27,78,52,249/-. Ld. AO also noted that, even though said development expenditure was capitalised in books, the same was claimed as admissible deduction while computation of income. Ld. AO noted that, said expenditure instead of being claimed as revenue expenditure in profit and loss account, to determined net pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt cost which mainly included salary and other general administrative expenses. The Hon'ble Karnataka High Court has held that in view of fact that said expenditure was in respect of scientific research and was incurred in relation to business carried on by the assessee, it was to be allowed as deduction under section 35(1)(iv) even if expenditure was capital in nature. The SLP filed by the revenue against the above decision has been dismissed by the Supreme Court [Special Leave to Appeal (C). CC No.(s) 8116/2014[ In the case of Tejsa Networks Ltd. Vs. ACIT, the Karnataka High Court has held that in case product development expenditure is treated as capital in nature, the same should be allowed as a deduction under section 35(i)(iv) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides in light of records placed before us. 10. We note that, assessee has been incurring expenses in assessment year 2005-06 in ITA No. 301/Bang/2014, against which, deduction was claimed in computation of income. Ld. AO, identically disallowed claim, by holding it to be capital in nature. Assessee also made similar alternate claim before authorities below for assessment year 2005-06, that it should be given deduction under section 35(1)(iv) of the Act, in respect of expenditure on scientific research related to business carried on by assessee. We note that, this Tribunal, while considering the claim remanded the issue to Ld. CIT(A) by observing as under. It is clear from the finding of the learned CIT (Appeals) that it has not gone i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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