M/S. ANABOND LTD.,CHENNAI vs. DCIT, CC-1(1), CHENNAI

ITA 2826/CHNY/2026Status: DisposedITAT Chennai09 September 2026AY 2018-1913 pages
AI SummaryPartly Allowed

What were the facts?

The assessee claimed weighted deduction for R&D expenses under Section 35(2AB) exceeding DSIR approval. The AO disallowed the excess, and the CIT(A) confirmed most disallowances, except for interest income. The assessee also contested disallowances under Section 14A and Section 40(a)(ii).

What did the Tribunal hold?

The Tribunal held that unapproved R&D expenditure is eligible for normal deduction under Section 35(1)(i)/(iv). Disallowances under Section 14A cannot be adjusted against book profits under Section 115JB. The issue regarding Section 40(a)(ii) was remitted back to the AO.

What were the issues?

Whether R&D expenditure exceeding DSIR approval is eligible for normal deduction, and if Section 14A disallowances can be adjusted against book profits.

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 35(1)(iv),Section 37(1),Section 14A,Section 115JB,Section 40(a)(ii),Section 35(1)(i)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

For Respondent: Ms. M.Subashri, Addl. CIT

PER PADMAVATHY.S, A.M: These appeals by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") both dated 11.03.2026 for Assessment Years (AYs) 2017-18 & 2018-19. The common issues contended by the assessee in both the AYs are as under:

1.

Denial of deduction u/s. 3

The order continues below.

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