Organica Aromatics Private Limited Vs DCIT (ITAT, Bangalore Bench)
Invoices Aren’t Evidence, TDS Isn’t a Passport &; DSIR Gets the Final Word: ITAT Revisits Claims u/s 37(1), 32 &; 35(2AB)
Relevant Facts
In Organica Aromatics Pvt. Ltd. v. DCIT, the Bangalore ITAT considered the assessee’s appeal for AY 2017-18. The company manufactured fine chemicals, aromatic chemicals & synthetic perfumery compounds, besides operating a DSIR-approved in-house R&D facility.
It returned income of ₹31,46,380, while the AO completed assessment u/s 143(3) on 18.12.2019 at ₹1,37,76,620. The additions concerned consultancy fees, weighted R&D deduction, depreciation on new machinery & export-rebate receivables written off. The CIT(A) substantially confirmed the disallowances, resulting in the appeal before the Tribunal.
Issues Before the Tribunal
The principal issues were whether consultancy fees paid to the Joint Managing Director were allowable u/s 37(1); whether weighted deduction u/s 35(2AB) could exceed expenditure certified by DSIR in Form 3CL; whether normal & additional depreciation u/s 32 had been correctly computed after verifying actual use of assets; & whether export incentives earlier offered as income could be deducted when subsequently written off.
The assessee also alleged violation of natural justice, improper rejection of additional evidence under Rule 46A & incorrect levy of interest u/s 234A, 234B, 234C & 234D.
