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TMI Blog2022 (3) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment activity - The entire expenses cannot be allowed as deduction to the assessee. As per the learned CIT (A) the impugned expenses should also be allocated to the other units of the assessee group concern which availed the benefit of research and development activity carried out by it. There was no doubt raised by the authorities below as far as genuineness of the expenses is concern. Undeniably research and development facility maintained by the assessee was approved by DSIR. What was doubted the quantum of the expenses by the learned CIT (A) which has led to the present penalty proceedings. Claim of the assessee at the most can be regarded as inaccurate claim which cannot be equated with the inaccurate particulars of income. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven though it has furnished a copy of certificate issued by the Department of Scientific and Industrial Research, New Delhi. This issue of R D Expenditure was travelled upto the Tribunal, and the Tribunal set aside the issue back to the file of AO for fresh consideration on the issue. In the set aside appellate proceedings, the ld.CIT(A) observed that it was clear that the result of the R D have actually been utilized by the group concerns and there was no evidence that the same was used exclusively for the purposes of products purchased by the assessee and not for the purchases made by any other concern from the manufacturing entity. It was also not established as to whether after incurring the expenditure on R D the assessee has purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case the assessee has claimed an expenditure of ₹ 28,48,709/- relating to the research and development activity carried out by it under section 37 of the Act. The AO has made the disallowance of 100% of the expenses claimed by the assessee which was restricted to 50% amounting to ₹ 14,24,354/- by the learned CIT (A) on the reasoning that the other associated/sister concern of the assessee also availed the benefit of research and development activity carried out by the assessee. Accordingly, the learned CIT (A) was of the view that the assessee is not entitled to claim 100% deduction of such expenses. As such, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to furnishing of inaccurate particulars of income or concealment of income. However, we note that the Hon ble Supreme Court in the case of Dilip N Shroff vs. JCIT reported in 161 taxman 218 has discussed the term inaccurate by observing that the word inaccurate signifies a deliberate act or omission on the part of the assessee. Thus, to arrive at the conclusion that, the assessee has furnished inaccurate particulars of income, it has to be tested whether it has been done so with the dishonest intent which cannot be regarded as an innocent act. In other words the element of consciousness in furnishing inaccurate particulars of income coupled with circumstantial evidences should be present in the particular case. Unless, the characters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esearch and development activity. Therefore, the entire expenses cannot be allowed as deduction to the assessee. As per the learned CIT (A) the impugned expenses should also be allocated to the other units of the assessee group concern which availed the benefit of research and development activity carried out by it. 8.6 There was no doubt raised by the authorities below as far as genuineness of the expenses is concern. Undeniably research and development facility maintained by the assessee was approved by DSIR. What was doubted the quantum of the expenses by the learned CIT (A) which has led to the present penalty proceedings. Thus, to our considered view, the claim of the assessee at the most can be regarded as inaccurate claim which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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