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TMI Blog2023 (1) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure incurred on the ground that the R D facility was approved only from the period 26.12.2014 to 31.03.2015 which is not covered in the impugned assessment year - HELD THAT:- We find that the R D facility of the assessee has been approved by the Competent Authority in terms of relevant provisions for the period 26.12.2014 to 31.03.2015, which is beyond the period of impugned assessment year. Therefore, we are of the considered view that the assessee is not entitled for claiming deduction towards R D expenditure u/s. 35(2) 35(1) for the impugned assessment year. We further noted that, before the AO the assessee has admitted mistake and accepted disallowance of expenses. There is no merit in the argument of the assessee that deduction claimed u/s. 35(2) (1) of the Act is in accordance with law and thus, we reject argument of the assessee and sustain the additions made by the AO towards disallowance of deduction claimed u/s. 35(1) (2)towards R D expenditure. Additional depreciation on new assets capitalized during the year u/s. 32(1)(iia) - Number of days asset put to use - AO has disallowed additional depreciation on the ground that the additional depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook profit u/s. 115JB of the Act by excluding provision for leave encashment and provision for gratuity. Appeal filed by the assessee is partly allowed. - ITA No.: 1176/Chny/2018 - - - Dated:- 18-11-2022 - Shri Mahavir Singh, Vice President And Shri G. Manjunatha, Accountant Member For the Appellant : Shri. R.S. Devaguru, Advocate For the Respondent : Shri. P.M. Senthil Kumar, JCIT ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income-tax (Appeals)-6, Chennai, dated 30.01.2018 and pertains to assessment year 2014-15. 2. The assessee has raised the following grounds of appeal: 1. The Commissioner of Income Tax (Appeals) 6 erred in confirming the addition of Rs.21,08,795/- being Sales Promotion expenses incurred doctors, without appreciating the facts. 2. The Commissioner of Income Tax (Appeals) 6 failed to appreciate the fact, that the expenditure incurred for the purpose of advertising the products and not for inducing the doctor. 3. The Commissioner of Income Tax (Appeals) 6 filed to distinguish the judgment in the case of PHL Pharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 6, be deleted. 3. At the outset, learned AR for the assessee submitted that the appeals filed by the assessee is time barred by 06 days for which necessary petition for condonation of delay along with affidavit explaining the reasons for the delay has been filed. The AR further submitted that the assessee could not file appeals within the time allowed under the Act, because the CIT(A) order dated 31.01.2018 received only on 27.02.2018 and their auditors M/s. P.B. Vijayaraghavan Associates, CA, undertook to do the needful soon after the rush of work of filing returns of income by 27.03.2018 was over, and had filed the appeal on 06.04.2018 with a delay of 06 days. The delay in filing appeal is neither intentional nor willful but for the unavoidable reasons, therefore, delay may be condoned in the interest of advancement of substantial justice. 4. The learned DR, on the other hand, strongly opposing condonation of delay petition filed by the assessee submitted that the reasons given by the assessee do not come within the ambit of reasonable and bonafide reasons, which can be considered for condonation of delay and hence, appeal filed by the assessee may be dismissed as not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is deductable or not u/s. 37(1) has been examined by the Hon ble Supreme Court in the case of Apex Laboratories Pvt Ltd vs DCIT (2002), 286 Taxmann 200 (SC), where it has been held that since acceptance of freebies by medical practitioners was punishable as per circular issued by Medical Counsel of India under MCI Regulations, 2002, gifting of such freebies by assessee Pharma Companies to medical practitioners would also be prohibited by law and thus, expenditure incurred for such freebies would not be allowed as deduction in terms of section 37(1) of the Act. Therefore, respectfully following the decision of Hon ble Supreme Court in the case of Apex Laboratories Pvt Ltd vs DCIT, (supra) we are inclined to uphold the finding of the ld. CIT(A) and reject the ground taken by the assessee. 9. The next issue that came up for our consideration from ground no. 5 to 9 of assessee s appeal is disallowance of deduction claimed u/s. 35(1) (2) of the Act towards R D expenditure amounting to Rs. 75,69,617/-. The AO has disallowed R D expenditure incurred by the assessee u/s. 35(1) of the Act on the ground that the R D facility was approved only from the period 26.12.2014 to 31.03.2015 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials available on record and gone through orders of the authorities below. The issue of additional depreciation u/s. 32(1)(iia) of the Act, when new assets has been purchased and put to use for less than 180 days, has been considered by the co-ordinate bench of ITAT, Kolkata in the case of Century Enka Limited vs DCIT, in ITA No. 568/Kol/2010, where it has been held that when the assessee has claimed 50% of additional depreciation on account of utilization of said assets in the business for less than 180 days, remaining 50% of additional depreciation should be allowed in the subsequent financial year. In this case, there is no dispute with regard to the fact that the assessee has purchased and put to use new assets, which is eligible for additional depreciation. In fact, the AO has accepted fact that the assessee is entitled for additional depreciation, however disallowed 50% of additional depreciation only on the ground that the assessee has claimed additional depreciation on assets purchased and put to use in the immediate preceding financial year. We find no merit in reasons given by the AO for simple reason that as per law, the assessee is entitled for additional depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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