9911796707
TMI Blog2024 (6) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... le opportunity of being heard. This ground of the assessee is partly allowed for statistical purposes. Disallowance of depreciation on goodwill on amalgamation - HELD THAT:- As decided in own case for 2010-11 [ 2024 (1) TMI 1295 - ITAT MUMBAI] on a careful perusal of the sixth proviso to sec. 32(1) of the Act, we noticed that the same is applicable only in a situation where the amalgamation takes place in the middle of the year i.e. the said proviso states that the aggregate amount of depreciation claimed by the amalgamating companies and amalgamated company for that year should not exceed eligible amount of depreciation of that year. In the instant case the amalgamation has taken place on 1.4.2009 and not in the middle of the year. Hence the sixth proviso to section 32(1) will not apply to the facts of the present case. Accordingly we set aside the reasoning given by the learned CIT(A) for confirming the disallowance of depreciation of goodwill. We noticed earlier that both the tax authorities have not examined the factual aspects relating to the goodwill amount of Rs.21.81 crores and also the depreciation claimed thereon. Hence the assessee also did not get opportunity to put for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of 100% of profits derived from Export Oriented Unit before considering the additions/deletions - HELD THAT:- For the year under consideration the assessee has not raised this issue before the lower authorities and therefore respectfully following the above decision of the Tribunal we remit the issue back to AO for examination with a direction to decide keeping in mind the decision of coordinate bench in the case of Reliance Industries Ltd [ 2020 (12) TMI 165 - ITAT MUMBAI] and decide in accordance with law. This ground is allowed for statistical purposes. Allowability of mark to market (MTM) loss u/s 37(1) - AO rejected the assessee's alternate plea that since section 43(5) is not applicable the MTM losses should be allowed under section 28 or 37(1) of the Act - HELD THAT:- As in own case for AY 2012-13[ 2024 (1) TMI 1295 - ITAT MUMBAI] nature of these items is not clear and we notice that no tax authority has examined these items. If these transactions have been entered in the course of carrying on of regular business activities and the underlying assets are trading items, the loss arising on their revaluation at the year end is allowable as deduction. It is to be seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44C(13) of the Act. The issues contended in these appeals and the C.O are common and therefore these appeals are heard together and disposed of through this common order. 2. The issues contended in the above appeals and the C.O are tabulated as under: Issues ITA No.77/M/21 ITA No. 1242/M/21 ITA No. 1241/M/21 CO No. 1/M/22 General C.O. No.1 Disallowance of depreciation on unverified purchases and other expenses Ground No.1 Disallowance of depreciation on goodwill on amalgamation Ground No.2 Transfer Pricing Adjustment on letter of comfort Ground No.3 Initiation of penalty proceedings u/s 271(1)(c) Ground No.4 Mark to market loss allowed as deduction under section 37(1) Ground No.1 C.O. No. 2 to 4 Disallowance of sales promotion expenses Ground No.2 Expenditure on Employee's stock option Ground No.3 C.O. No. 5 Weighted deduction u/s 35(2AB) Ground No. 4 5 Ground No.1 to 3 Pre-commencement expenses Ground No.6 C.O. No. 6 Deduction u/s 10AA Additional Ground No.5 Deduction of Education Cess Additional Ground No.6 3. The assessee vide letter dated 17.08.2023 withdrew the additional ground no.6 and hence the same is dismissed as withdrawn. 4. The assessee is a public limited company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tune of Rs. 2,95,87,707 accordingly assessing the book profit at Rs. 17,31,91,70,282/- under section 115JB of the Act. 6. Aggrieved the assessee filed further appeal before the CIT(A) partly allowed the appeal by granting relief to the assessee in respect of the following: Disallowance of Mark to market loss of Rs. 1,18,20,185 Disallowance of sales promotion expenses amounting to Rs. 82,30,32,740 Weighted Deduction under Section 35(2AB) of the Act on Clinical Analytical Charges of Rs. 49,94,52,208; Weighted deduction under Section 35(2AB) of the Ac other R D expenditure of Rs. 8,17,46,000 (through rectification under section 154 of the Act) Disallowance of ESOP expenditure of Rs. 34,65,39,003 not debited to P L Pre-commencement revenue expenses incurred at Pithampur SEZ Plant II and Nagpur SEZ Plant of Rs. 2,89,59,855 Additional depreciation on asset put to use less than 180 days of Rs.7,42,63,633; Addition of tax on non-monetary perquisites to book profits under section 115JB of the Act of Rs. 2,95,87,707 Transfer Pricing Adjustment on account of Corporate Guarantee Fees of Rs.28,67,419 The CIT(A) upheld the following additions/disallowances Disallowance for depreciation on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our view, we may leave aside the issue as to whether the said retraction is valid or not, since the assessee is supporting its stand for not disallowing these expenses on merits. In our view, the stand of the assessee, in the facts and circumstances of the case, merits acceptance. First of all, there is no dispute that the amount of Rs.48,89,052/- is not in the nature of commission expenses, i.e., the assessee has admitted that it has booked bogus expenses by way of commission payments only. Secondly, it has furnished the details of materials purchased through these bills, delivery challans etc., to prove receipt of materials. The assessee has also explained the reason as to why these expenses were not added to the total income while computing total income. We notice that the tax authorities have ignored all these aspects on merits, but placed their reliance on the statement made u/s 132(4) of the Act. The provisions of sec.132(4) enables the assessing officer to presume that the admission made in the statement may be used in the assessment proceedings. It is well settled proposition of law that it is a rebuttable presumption, meaning thereby, the deponent could show that the adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. On legal aspects, the assessee has contended that the addition could not be made merely on the basis of statement given on oath. 7.5 The ld D.R, on the contrary, supported the orders passed by tax authorities on this issue. 7.6 We notice that the assessing officer has entirely placed his reliance on the statement given by the employees and directors of the assessee u/s 132(4) of the Act. Besides the above, the AO has also placed reliance on the statement given by Shri Naresh Kantilal Shah, one of the accommodation entry providers and also the statement given by the Vice President (Taxation). However, we notice that the surrender made by him was not added by the AO. We notice that the assessing officer did not examine the explanations of the assessee as to why it was constrained to make surrender towards alleged bogus purchases. Though there was no specific retraction of the surrender so made, yet we have noticed earlier that the surrender made in the statement recorded u/s 132(4) of the Actcan be rebutted by producing evidences against the surrender. In the instant case, the additional evidences relied upon by the assessee to rebut the surrender are:- (a) Re-revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of the assessee as per pooling of interest method prescribed by Accounting Standard-14. In terms of the scheme all Assets Liabilities of the transferor company have been transferred to the assessee-company at their respective book value and all intercompany balances were canceled. Since the transferor companies were wholly owned subsidiaries of the assessee, the shares held by assessee in the transferor company were cancelled and no shares were issued to effect the amalgamation. After giving effect the accounting treatment in terms of the scheme the balance lying in the investment account of the assessee aggregating to Rs. 21.81 crores pertaining to purchase of Novodign Ltd. was shown as goodwill in the accounts of the assessee company. The said amount is arising out the acquisition of shares of the said company by the assessee at a higher price in earlier years. The assessee amortized the goodwill over a period of five years in the books of accounts beginning from AY 2010-11. The assessee claimed the depreciation on the goodwill through a note to the revised return of income. The AO denied the depreciation by relying on the decision of Goetz India Ltd. (284 ITR 323) stating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of net assets. (e) The business advantage so visualized by the assessee is considered as an intangible asset eligible for depreciation. 7.8 In the instant case, the assessee has acquired its subsidiary companies by taking over their assets and liabilities in lieu of investments made by it. The above said short fall shall be termed as goodwill as per accounting principles. The question is whether such kinds of goodwill would fall under the category of business or commercial rights as mentioned in section 32(1)(ii) of the Act, which was interpreted by Hon'ble Supreme Court in the case of Smiffs Securities Ltd (supra). Hence it is imperative for the assessee to show that the good will, being short fall in the value of investments, would also rank at par with the good will which was considered as business or commercial rights as mentioned in sec. 32(1)(ii) of the Act. However, the fact remains that both the tax authorities have not examined this aspect. 7.10 We noticed that the learned CIT(A) has taken support of the sixth proviso to section 32(1) of the Act to reject the claim of depreciation on the good will. However, on a careful perusal of the sixth proviso to sec. 32(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d discussion above, following the recent decision of Hon'ble Bombay High Court in the case of Everest Kanto, and Mumbai ITAT in Glenmark Pharmaceuticals Ltd. in ITA No.5031/Mumbai/2012 dated 13.11.2013 (A.Y. 2008- 09), a downward adjustment to the naked quotes of the rates of bank Guarantee has been done in this year, while benchmarking the transaction. It is seen that the bank guarantee rates vary generally between 1% to 3% giving an average of about 2.0%. Accordingly, it would be appropriate to charge 1.5% from the A (average bank guarantee fee charged by bank less 0.50%). 15. On further appeal the CIT(A) upheld the TP Adjustment by stating that the letter of comfort given by the assessee is nothing but the guarantee given by the assessee and that the assessee is having a financial obligation to the Bank. Therefore, the CIT(A) held that it is an international transaction warranting a TP Adjustment. 16. The ld. AR submitted that the Guarantee Commission in the case of letter of comfort is only warranted in the cases where the letter of comfort is legally binding on the assessee and that there is an obligation by the assessee to the guarantor to make good the losses in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not. Therefore to held letter of comfort as international transaction/ transaction providing guarantee , it has to be seen whether the letter of comfort cast any additional obligation on the assessee and whether there could be any financial liability on the assessee. In the present case........ The appellant have issued a letter of comfort to ANZ Manila, Philippines. In the Letter of Offer, the following two clauses address the aforementioned issue. In Clause 1, dealing with the Conditions Precedent, one of the conditions is Lodgment of other documentary requirements to ANZ's satisfaction including the issuance and delivery of letter of comfort from Lupin Limited. In addition, in Clause 3 detailing Mandatory requirement, it is stipulated that the Borrower shall prepay all outstanding or provide cash cover (as appropriate) under the facility if the appellant ceases to own at least 51 percent effective share capital in the Borrower. The above terms in the letter of offer creates an obligation on the borrower that the borrower shall prepay the loan in case the assessee ceases to hold 51% stake in the borrower company. Therefore the financial obligation is cast upon the borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in the case of National Thermal Power Company Ltd. Vs. CIT [(1998) 229 ITR 383 (SC)] we admit this additional ground for disposal on merits. 21. The ld AR submitted that a similar issue was contended before the coordinate bench for AY 2009-10 where the Tribunal has remitted the issue back to the AO for examination. The ld AR however submitted that the coordinate bench in the case of Reliance Industries Ltd. [(ITA No. 7299 136/Mum/2017) dated 10 November 2020] where it has been held that deduction under Section 10AA/10B should be computed considering only the commercial profits derived by SEZ/EOU units from exports and not net profit after adjusting various additions/disallowances under Income Tax Act. Accordingly the ld AR prayed that the issue may be decided by the bench for the year under consideration. 22. The ld DR relied on the order of the lower authorities. 23. We heard the parties and perused the material on record. We notice that the coordinate bench in assessee's own case for AY 2009-10 has considered a similar issue and held that 12 The assessee has raised an additional ground with regard to the claim for deduction u/s 10B of the Act. In this ground, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd derivatives contract which were valued at the year end. Accordingly, the assessee provided for MTM loss of Rs. 1,18,20,185/-. The AO disallowed the expenditure by placing reliance on the CBDT Instruction No. 3/2010 dated 23.03.2010. The AO also rejected the assessee's alternate plea that since section 43(5) is not applicable the MTM losses should be allowed under section 28 or 37(1) of the Act. Aggrieved the assessee filed appeal before the CIT(A). The CIT(A) deleted the disallowance by placing reliance on the decision of the Hon'ble Bombay High Court in assessee's own case for AY 2008-09 and the order of his predecessor for AY 2009-10. Against the order of the CIT(A) the department is in appeal before the Tribunal. 26. The ld DR placed reliance in the order of the AO. The ld. AR brought to our attention that this is a recurring issue in assessee's case and that the Co-ordinate Bench while considering the appeal for AY 2012-13 has held that 35.1 We notice that an identical issue has been examined by the Tribunal in the assessee's own case in AV 2000-10. The relevant discussions made in that year are extracted below: 13. We shall now take up the appeal filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding of the CIT (Appeals) that the loss incurred by the Respondent Assessee was a revenue loss and not connected with any speculation activities. The Tribunal found that the transaction of forward contract had been entered into for the purpose of hedging in the course of its normal business activities of import and export of diamonds. Thus, the Revenue's appeal was dismissed by the impugned order of the Tribunal. 6. Mr. Malhotra, learned Counsel appearing for the Revenue submits that this appeal had to be admitted as the impugned order has ignored its order in the case of S. Vinodkumar Diamonds (P.) Ltd. v. Addl. CIT [2013] 59 SOT 124/35 taxmann.com 337 (Mum. - Trib.) rendered on 3 May 2013 which on similar facts is in favour of the Revenue. He further submits that the impugned order of the Tribunal is suspect because it accepts the Respondent assessee's claim without calling upon it to prove that the same was not speculative. Lastly, he sought to place reliance upon Accounting Standard-11 to claim that such a loss is not allowable thereunder . 7. The impugned order of the Tribunal has, while upholding the finding of the CIT (Appeals), independently come to the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of this court in CIT v. Badridas Gauridu (P.) Ltd. [2003] 261 ITR 256/[2004] 134 Taxman 376 (Mum.) was not brought to the notice of the Tribunal when it rendered its decision in S. Vinodkumar Diamonds (P.) Ltd. (supra ). In the above case, this court has held that forward contract in foreign exchange when incidental to carrying on business of cotton exporter and done to cover up losses on account of differences in foreign exchange valuations, would not be speculative activity but a business activity. 8. In the above view, the question of law, as formulated by the Revenue, does not give rise to any substantial of law. Thus, not entertained. The Ld CIT(A) has followed the decision rendered by Hon'ble jurisdictional High Court and has decided this issue in favour of the assessee. 13.3 We notice from the break-up details of the claim extracted above, the M to M loss on forward contracts was Rs.42.53 lakhs. The other two items relate to ineffective Option Contracts and Derivative asset w/off relating to option contracts . The nature of these items is not clear and we notice that no tax authority has examined these items. If these transactions have been entered in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bench of Bangalore ITAT in the case of Biocon Ltd vs. DCIT (144 ITD 21). It is pertinent to mention that the decision rendered by the Special bench has since been upheld by the Hon ble Karnataka High Court in 430 ITR 151. 15.2 The Ld D.R submitted that the Circular no. 9 of 2007 issued by CBDT has not been considered by the Special bench or by the Hon ble High Court of Karnataka. 15.3 We heard Ld A.R and perused the record. It is well settled proposition that the Circular issued by CBDT is binding only on tax authorities and it will not bind on the Courts. The Hon ble Karnataka High Court has dealt with this issue as under in the case of Biocon Ltd (supra) as under:- 9. In the instant case, the ESOPs vest in an employee over a period of four years i.e., at the rate of 25%, which means at the end of first year, the employee has a definite right to 25% of the shares and the assessee is bound to allow the vesting of 25% of the options. It is well settled in law that if a business liability has arisen in the accounting year, the same is permissible as deduction, even though, liability may have to quantify and discharged at a future date. On exercise of option by an employee, the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Rs.5,74,85,066/- claimed by the assessee represents the second type of discount mentioned in (b) above, i.e., the additional discount arising at the time when the employees actually exercise option. It is the submission of the assessee that the first type of discount did not arise in the instant case, since there was no difference between market price of equity shares and the price at which the shares were offered to the assessee. As per the decision rendered by the Special bench of Bangalore ITAT in the case of Biocon Ltd (supra), the second type of discount arising at the time of actual exercise of option by the employees is also allowable as deduction. This is clear from the discussions made by the Special bench in paragraph 11.1.6 of its order, more particularly, the discussion made in respect of Situation II explained by way of illustration by the Tribunal. Accordingly, the above said claim of the assessee is allowable as deduction. 15.5We noticed that the assessee has claimed this amount as deduction before the AO during the course of assessment proceedings and it is the case of the AO that the assessee has not accounted for the same in the books of account. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falling within one of the three years of the vesting period, in which it was held that one third of the total amount of discount computed on the basis of the market price of the shares at the time of grant of option, is deductible. It is evident from the SEBI Guidelines that these deal with the deductibility of discount in the hands of company during the years of vesting period. These Guidelines are silent on the position emanating from variation in the market price of the shares at the time of exercise of option by the employees vis- -vis the market price at the time of grant of option. In other words, the SEBI Guidelines prescribe accounting treatment only in respect of the period of vesting of the options and the situation arising out of unvested options or vested options lapsing. The very reference by the Chennai Bench of the Tribunal in SSI Limited (supra) to the SEBI Guidelines is indicative of the fact that it dealt with a year during which the options were vesting with the employees and the company claimed discount during the vesting period. The Hon'ble Madras High Court in the case of PVP Ventures (supra) has upheld the view taken by the Chennai Bench in the case of SS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., the total income has to be computed as per the provisions of Income tax Act. If the deduction is otherwise allowable as deduction in computing total income, the same is allowable irrespective of the fact whether the same is accounted in the books of account or not. We notice that this principle has been applied by the Special bench with regard to second type of discount. Accordingly, we are of the view that the Ld CIT(A) was justified in allowing the deduction of Rs.5,74,85,065/- claimed by the assessee. Accordingly, we uphold the order passed by Ld CIT(A) on this issue. 12.2 Since the facts are identical in this year also, following the above said order passed by the Tribunal, we hold that the learned CIT(A) was justified in allowing the ESOP expenditure claimed by the assessee. Accordingly we uphold the order passed by the learned CIT(A) on this issue. 31. Respectfully following the above decision, we see no infirmity in the order of the CIT(A) in allowing the deduction towards ESOP expenses claimed by the assessee. Weighted deduction under section 35(2AB) Ground No.4 5 32. During the year under consideration the assessee has incurred expenditure of Rs. 44,37,02,233/- on clini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arat High Court has considered this issue as under in its decision reported in the case of Cadila Healthcare Ltd (2013)(31 taxmann.com 300)(Guj) as under:- 11.Revenue has also suggested following question : D. Whether the Appellate Tribunal has substantially erred in holding that the expenses incurred outside the approved R D facility would also get weighted deduction based on the word under on in house interpreting contradictorily to the finding of coordinate bench in Concept Pharmaceuticals Ltd. v. ACIT (ITAT, Mum) reported at 43 SOT 423? 12. We may record that question 'E' in the appeal memo is an additional question which has an element of above noted question. We have, therefore, not separately reproduced the same in this order. The issue is whether the assessee who has incurred expenditure for scientific research, which was not in the in-house facility, could be covered for deduction under section 35(2AB) of the Income Tax Act, 1961. 13. More or less, facts are not in dispute. The assessee carried out scientific research in its facility approved by the prescribed authority. It incurred various expenditure including on clinical trials for developing its pharmaceutical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd filing an application for a patent under the Patents Act, 1970. 16. The whole idea thus appears to be to give encouragement to scientific research. By the very nature of things, clinical trials may not always be possible to be conducted in closed laboratory or in similar in-house facility provided by the assessee and approved by the prescribed authority. Before a pharmaceutical drug could be put in the market, the regulatory authorities would insist on strict tests and research on all possible aspects, such as possible reactions, effect of the drug and so on. Extensive clinical trials, therefore, would be an intrinsic part of development of any such new pharmaceutical drug. It cannot be imagined that such clinical trial can be carried out only in the laboratory of the pharmaceutical company. If we give such restricted meaning to the term expenditure incurred on in-house research and development facility, we would on one hand be completely diluting the deduction envisaged under sub-section (2AB) of section 35 and on the other, making the explanation noted above quite meaningless. We have noticed that for the purpose of the said clause in relation to drug and pharmaceuticals, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deduction under section 35(2AB) of the Act in relation to the question on hand. The certificate issued was only for the purpose of listing the total expenditure under the Rules. Therefore, no question of law arises. It can be noticed that the Hon ble Gujarat High Court, after making extensive discussion on the issue and after holding that the Tribunal has committed no error, refused to admit the issue by observing no question of law arises. The revenue has challenged before Hon ble Supreme Court the decision of Hon ble Gujarat High Court in holding that no question of law arises. The Hon ble Apex Court, vide its order dated 14th October, 2015 passed in SLP (c) No.770/2015 has directed the Hon ble Gujarat High Court to admit the question of law and hear the revenue. However, no other order, if any, passed by Hon ble Gujarat High Court was brought to our notice on the issue under our consideration in pursuance of the directions given by Hon ble Supreme Court. In this connection, we may gainfully refer to the decision rendered by co-ordinate bench of Hyderabad in the case of DCIT vs. Aurobindo Pharma Limited (supra), wherein the effect of direction given by Hon ble Supreme Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EZ to the tune of Rs. 2,89,59,855/-. The AO by following the decision of his predecessor disallowed the said expenditure. The CIT(A) gave relief to the assessee by directing the AO to allow the expenditure as revenue expenditure. The ld. AR submitted that the issue is covered by the decision of the Co-ordinate Bench in assessee's own case for AY 2010-11 and accordingly prayed that the CIT(A) decision be upheld. 36. We have heard the parties and perused the material on record. The Co- ordinate Bench while considering issue for AY 2010-11 has held that 14.3 We notice that the Ld CIT(A) has accepted the fact that the business has been set up and hence revenue expenses incurred in that plant are allowable as deduction. He also accepted the alternative contention of the assessee that the Pithampur SEZ plant is extension of existing business and accordingly directed the AO to allow the exhibit batch expenditure as revenue expenditure. However, he rejected the claim of depreciation. The revenue is aggrieved. 14.4 The uncontroverted fact is that the business of the assessee in Pithampur SEZ has been set up and further it is an extension of existing business. We notice that the Ld CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority is to approve expenditure in form No. 3CL from year to year. Looking into the provisions of rules, it stipulates the filing of audit report before the prescribed authority by the persons availing the deduction under section 35(2AB) of the Act but the provisions of the Act do not prescribe any methodology of approval to be granted by the prescribed authority vis- -vis expenditure from year to year. The amendment brought in by the IT (Tenth Amendment) Rules w.e.f. 1-7-2016, wherein separate part has been inserted for certifying the amount of expenditure from year to year and the amended form No. 3CL thus, lays down the procedure to be followed by the prescribed authority. Prior to the aforesaid amendment in 2016, no such procedure/methodology was prescribed. In the absence of the same, there is no merit in the order of Assessing Officer in curtailing the expenditure and consequent weighted deduction claim under section 35(2AB) of the Act on the surmise that prescribed authority has only approved part of expenditure in form No. 3CL. We find no merit in the said order of authorities below. 46. The Courts have held that for deduction under section 35(2AB) of the Act, first step wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. 8. 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. 9. The provisions nowhere suggest 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 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 s. itself, the assessee is entitled to weighted deduction on expenditure so i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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