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TMI Blog2024 (2) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... t of research and development expenses claimed u/s 35(2AB) of the I.T. Act, 1961, hereinafter referred to as the "Act". Facts giving rise to the present appeal are that the assessee, a company , filed its e-return on 29.11.2014 declaring total income of Rs. 19,54,81,780/-. The assessee had also claimed deduction u/s 35(2AB) amounting to Rs. 2,18,52,259/- (revenue expenditure of Rs. 1,98,93,097/- and capital expenditure of Rs. 19,59,162/-). Out of this expenditure, the AO disallowed a sum of Rs. 9,79,000/- on the basis that the Department of Scientific & Industrial Research ('DSIR' in short) had approved weighted deduction of Rs. 1,98,98,000/-. Thus, he disallowed Rs. 9,61,259/-. Aggrieved against this the assessee preferred appeal before the learned CIT(A), who sustained the addition and dismissed the appeal of the assessee. Now the assessee is in appeal before this Tribunal. 3. Learned counsel for the assessee submitted that the Tribunal under identical facts in A.Y. 2013-14 had allowed the claim of the assessee in ITA No. 8160/Del/2018. He contended that the amendment in the provision was brought later in statute book. 4. On the other hand learned DR supported the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of CIT vs Sandan Vikas (India) Ltd reported in 335 ITR 117 (Del) wherein it was held as under:- "1. The assessee claims that it is engaged in the business of manufacturing of automotive air conditioning and is also undertaking research and development activity in this behalf. In the assessment year, i.e., assessment year 2005-2006, the assessee claimed a deduction of Rs. 3,83,62,003/- under Section 35 (2AB) of the Income Tax Act (hereinafter referred to as "the Act"). The business expenses incurred are naturally allowed as deductions, however, the aforesaid provisions gives weighted deduction to the assessees, who are engaged into research and development activity. The objective is to encourage research and development by the business enterprises in India. 2. The provision further states that in order to claim this weighted deduction, it is to be certified by the Competent Authority that the assessee had undertaken research and development activity. The competent authority in this behalf is Department of Scientific & Industrial Research (DSIR). The assessee had approached DSIR vide application dated 10th January, 2005. The DSIR vide its letter dated 23rd Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gest or imply that research and development facility is to be approved from a particular date and, in other words, it is nowhere suggested that date of approval only will be cut-off date for eligibility of weighted deduction on the expenses incurred from that date onwards. A plain reading clearly manifests that the assessee has to develop facility, which presupposes incurring expenditure in this behalf, application to the prescribed authority, who after following proper procedure will approve the facility or otherwise and the assessee will be entitled to weighted deduction of any and all expenditure so incurred. The Tribunal has, therefore, come to the conclusion that on plain reading of section itself, the assessee is entitled to weighted deduction on expenditure so incurred by the assessee for development of facility. The Tribunal has also considered Rule 6(5A) and Form No. 3CM and come to the conclusion that a plain and harmonious reading of Rule and Form clearly suggests that once facility is approved, the entire expenditure so incurred on development of R&D facility has to be allowed for weighted deduction as provided by Section 35(2AB). The Tribunal has also considered the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jarat), wherein the Hon'ble under identical facts has held as under: "7. The Tribunal has considered the submissions made on behalf of the assessee and took the view that section speaks of (i) development of facility; (ii) incurring of expenditure by the assessee for development of such facility; (iii) approval of the facility by the prescribed authority, which is "DSIR"; and (iv) allowance of weighted deduction on the expenditure so incurred by the assessee. The provisions nowhere suggest or imply that "R & D" prime prime facility is to be approved from a particular date and in other words, it is nowhere suggested that date of approval only will be cut-off date for eligibility of weighted deduction on the expenses incurred from that date onwards. A plain reading clearly manifests that the assessee has to develop facility, which presupposes incurring expenditure in this behalf, application to the prescribed authority, who after following proper procedure will approve the facility or otherwise and the assessee will be entitled to weighted deduction of any and all expenditure so incurred. The Tribunal has, therefore, come to the conclusion that on plain reading of section its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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