Case Law Details
Indian Tonners and Developers Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi has ruled in favor of Indian Tonners and Developers Ltd in a dispute regarding the disallowance of a deduction claimed under section 35(2AB) of the Income Tax Act. The Assessing Officer disallowed the deduction due to the absence of Form 3CL. However, the ITAT held that the genuineness of the expenditure was not in doubt, and the first appellate authority erred in ignoring Form 3CL issued by the competent authority. The disallowance of Rs.29,05,724/- was deemed unsustainable and deleted.
The dispute revolves around the disallowance of a deduction claimed under section 35(2AB) of the Income Tax Act. The Assessing Officer disallowed the deduction due to the absence of Form 3CL.
Analysis: The ITAT Delhi notes that the assessee had furnished Form 3CLA and Form 3CK for the impugned assessment year, as well as Form 3CL for the previous assessment year. The only discrepancy was the absence of Form 3CL for the relevant assessment year. However, the ITAT emphasizes that there was no doubt regarding the genuineness of the expenditure claimed, as the Assessing Officer had allowed a 100% deduction of revenue expenditure related to research and development.
The ITAT further highlights that the first appellate authority ignored the Form 3CL issued by the competent authority, which was furnished by the assessee before them. The ITAT deems this disregard as unacceptable, as the Form 3CL entitles the assessee to claim the deduction under section 35(2AB) of the Act. Therefore, the disallowance of Rs.29,05,724/- is deemed unsustainable, and the ITAT deletes the disallowance.
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