9911796707
TMI Blog2023 (5) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Companies Act, 1956. It is engaged in the business of manufacturing of carbon and alloy steels. The Return of Income for the assessment year 2015-16 was filed on 26.11.2015 declaring total income of Rs.57,44,61,670/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 22.12.2017 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at a total income of Rs.58,43,52,930/-. While doing so, the Assessing Officer denied the claim for weighted deduction on R&D expenditure claimed u/s 35(2AB) of Rs.98,91,263/- for want of requisite approval received from DSIR. Even on appeal before the ld. CIT(A), the ld. CIT(A) confirmed the action of the Assessing Officer. 3. Being aggrieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year relevant to the assessment year beginning on or after the 1st day of April, 2021, the deduction under this clause shall be equal to the expenditure so incurred. Explanation.-For the purposes of this clause, "expenditure on scientific research", in relation to drugs and pharmaceuticals, shall include expenditure incurred on clinical drug trial, obtaining approval from any regulatory authority under any Central, State or Provincial Act and filing an application for a patent under the Patents Act, 1970 (39 of 1970). (2) No deduction shall be allowed in respect of the expenditure mentioned in clause (1) under any other provision of this Act. (3) No company shall be entitled for deduction under clause (1) unless it enters into an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of fact that the assessee company had not adhered to the prescribed conditions. This denial of extension was communicated to the Assessing Officer by the prescribed authorities. If the appellant is aggrieved by the denial of extension of approval u/s 35(2AB), the only course of action available to the appellant is to invoke writ jurisdiction of the Hon'ble High Court. Thus, the material on record clearly indicates that there was no requisite approval as envisaged u/s 35(2AB), which is condition precedent for availing the benefit of deduction u/s 35(2AB) of the Act. It is also settled principle of construction while construing the provisions of exemption, the provisions should be construed strictly as laid down by the Constitution Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer had denied the claim for deduction u/s 35(2AB) for the assessment year 2005-06 on the ground that the recognition was given by the DSIR in February, 2006, the assessee entitled for deduction only from the next assessment year onwards. The Hon'ble High Court reversing the findings of the Assessing Officer held that the cut off date mentioned by the DSIR has no relevance, but whereas in the present case, the approval as envisaged was specifically denied for the failure of the assessee to adhere the prescribed conditions. Similarly, the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Claris Lifesciences Ltd., 174 Taxman 130 (Gujarat) only laid down that section 35(2AB) nowhere suggests that the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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