CAMPHOR & ALLIED PRODUCTS LIMITED,VADODARA vs. THE ADDL. CIT, RANGE-1, BARODA

The Ld. CIT(A) erred in denying the claim of weighted deduction u/s.35(2AB) @ 200% of Rs.42,11,147/- without appreciating the detailed submission of the appellant company and not following the judgement of Hon’ble High Court of Gujarat in the case of Commissioner of Income Tax Vs. Claris Lifescience Ltd. 174 Taxman 113(Guj.).

It is submitted that the Department of Science & Industrial Research, Ministry of Science and Technology has renewed recognition of In-House R&D unit upto 31/03/2012 and the same was filed with the CIT. On the fact, the CIT ought to have allowed the claim of weighted deduction u/s.35(2AB) as claimed by the appellant.

Ground Nos.1 & 2 are inter-connected. Briefly stated, facts are that the assessee-company is engaged in the business of manufacturing of Fine Chemicals. The appellant had claimed weighted deduction u/s.35(2AB) of the Act at 200% of Rs.42,11,147/- which was disallowed by the Assessing Officer stating that assessee has not maintained separate books of accounts. On the other hand, assessee’s contention was that any expenditure incurred by the assessee on scientific research on the in-house “R&D” facility approved by the prescribed authorities has to be allowed by deduction of expenditure so incurred for development of in-house facility is to be held as eligible for weighted deduction. The assessee has filed renewal of recognition of in-House R&D valid upto 31/03/2012 and submitted that assessee had already filed required details to the department of Scientific & Industrial Research Ministry of Science and Technology and a copy of Form M/s.Camphor & Allied Products Ltd. vs. Add.CIT Asst.Year – 2011-12 No.3CM which was approved by the government Department for R&D facilities. But the Assessing Officer was not agreed with the contention and disallowed a sum of Rs.42,11,147/-.

Against the said order of Assessing Officer, assessee preferred first statutory appeal before the Ld.CIT(A) who confirmed the action of the Assessing Officer.

Now aggrieved assessee has filed second statutory appeal before us.

We have gone through the relevant record and impugned order and heard both the parties. In similar facts and circumstances of the case, in ITA No.819/Ahd/2015 for AY 2010-11 (in assessee’s own case) dated 28/06/2018, the Co-ordinate Bench has granted relief to the assessee with the following observations:

In the case of CIT Vs. Claris Lifesciences Ltd. 174 Taxmann 113 (Guj.) (2008). It has been contended that whether section 35(2AB) nowhere suggests that date of approval of research and development facility will be cut-off date for eligibility of weighted deduction under this section on expenses incurred from that date onwards, once facility is approved, entire expenditure so incurred on development of research and development facility has to be allowed for weighted deduction.

Respectfully following the aforesaid Jurisdictional High Court judgement, we allow this ground of appeal of the appellant.”

Since relief was already granted by this Co-ordinate Bench following the Hon’ble Jurisdictional High Court judgement, we find merit in the case of the assessee and allow the ground of appeal of the assessee. Thus, in parity with the aforesaid order of the Co-ordinate Bench, we allow the appeal of the assessee. M/s.Camphor & Allied Products Ltd. vs. Add.CIT Asst.Year – 2011-12

In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 13/11/2019 ( MANISH BORAD ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER

""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त(अपील) / The CIT(A)-1, Vadodara "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त //// उप/सहायक पंजीकार (Dy./Asstt.