Case Law Details
Shilpa Medicare Ltd. Vs ACIT (ITAT Bangalore)
Provisions of Sec. 35(2AB) of Income Tax Act, nowhere suggest simply that R& D facility is approved from particular date and in other words, it is no where suggested that date of approval only will be cut off date for eligibility. The court further held that once facility is approved, the entire expenditure so incurred on development of R&D facility has to be allowed for weighted denudation. The Hon’ble Delhi High Court in the case of Maruthi Suzuki India Pvt Ldt., Vs Union of India (2017) 397 ITR 728 (Delhi), had considered an identical issue and held that for availing the benefit u/s 35(2AB) of the Act, what is relevant is not the date of recognition or the cut off date mentioned in the certificate of the DSIR or even the date of approval, but the existence of recognition. The Hon’bel Gujarat High Court in the case of Banco Product India Ltd., Vs. DCIT (supra) had once again reiterated its earlier position in the case of claris lifescience ltd. (supra) and held that once an application is filed by the assessee to the prescribed authority, the assessee would have no control over when such application is processed and decided. The Hon’ble court further held that period during which the approval is granted is not relevant as long as such approval is granted and expenditure has been incurred for this specified purpose.
In the present case, the Assessee was granted recognition of Assessee’s in house R & D unit granted by the Government of India, Ministry of Science and Technology on on 19th January, 2011 and therefore for AY 2011-12, the Assessee was entitled to deduction u/s.35(2AB) of the Act. The date of application as 12.5.2011 as mentioned in the approval in Form No.3CM was the date on which application for issue of Form No.3CM was made. The application for issue of Form No.3CM is not relevant for allowing deduction under section 35(2AB) of the Act. Form 3CM quantifies the expenditure incurred for carrying out scientific research. The assessee has to make an application for approval in prescribed form 3CK for issue of Form No.3CM and also filed necessary evidence including details of expenditure. Therefore the date of application for approval does not assume any significance as admittedly, the Assessee has obtained approval u/s.35(2AB) of the Act and in any case for AY 2011-12, there was in fact an approval dated 19.1.2011. The Assessee is therefore entitled to deduction u/s.35(2AB) of the Act. We hold and direct accordingly.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal by the Assessee against the order dated 9.9.2015 of CIT(A) Kalaburagi, relating to AY 2011-12.
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