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| The Tax Publishers2020 TaxPub(DT) 1513 (Ahd-Trib) INCOME TAX ACT, 1961
Section 35(2AB)
Once the facility of in-house R&D was approved by DSIR the whole of the expenditure has to be allowed hence the expenditure relating to contract labours, professional fees and GET salary would be allowed to assessee.
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Deduction under section 35(2AB) - Weighted deduction - Expenditure relating to contract labour, professional fees and GET salary - Approval of R&D facility by DSIR
Assessee had claimed weighted deduction under section 35(2AB) which the AO had restricted the claim by disallowing an amount of Rs. 22,32,326 by holding that such expenditure for whole of the year was not found eligible as per the order of DSIR. In succeeding para the AO had held that a part of expenditure relating to contract labour, professional fees and GET salary was not allowable as the DSIR had excluded the same for allowance under section 35(2AB). Once the facility of in-house R&D was approved by DSIR the whole of the expenditure had to be allowed. AR therefore argued disallowance sustained by CIT(A) was not justified and needs to be deleted. Held: Since the approval was granted during the previous year relevant to the assessment year in question, the assessee was entitled to claim weighted deduction in respect of the entire expenditure incurred under section 35(2AB) by the assessee.
Followed:CIT v. Claries Lifescience Ltd. (2010) 326 ITR 251 (guj).
REFERRED : CIT v. CIT v. Sun Pharmaceuticals Ltd. (2017) 85 Taxmann.com 80 (Guj).
FAVOUR : In assessee's favour.
A.Y. : 2011-12 to 2014-15
INCOME TAX ACT, 1961
Section 35(2AB)
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