SIDDHARTH STARCH PRIVATE LIMITED,PUNE vs. DCIT, CIRCLE 5, PUNE, PUNE

The sole grievance of the assessee in the instant appeal is against the disallowance of weighted deduction u/s.35(2AB) of the Act at Rs.93,41,332/-.

At the outset, ld. Counsel for the assessee submitted that even though the assessee has duly filed Form No.3CM, Form No.3CLA but Form No.3CL has not been issued by Department of Scientific and Industrial Research (DSIR) and such non-issuance of Form No.3CL is totally attributable to DSIR. He however fairly accepted that in absence of issue of Form No.3CL, the assessee’s claim of weighted deduction u/s.35(2AB) of the Act cannot be allowed. He further submitted that genuineness of the Capital expenditure at Rs.27.29 lakh and Revenue expenditure at Rs.34.98 lakh has not been doubted by the Revenue authorities at any stage and therefore only prayed that the Revenue expenditure may be allowed at 100% and depreciation as per the applicable rates may be allowed for the Capital expenditure.

On the other hand, ld. DR supported the order of ld.CIT(A).

We have heard the rival submissions and perused the record placed before us. We observe that the assessee is a Private Limited company and engaged in the business of manufacture of high quality native potato starch and catering to diverse sectors such as food, pharmaceuticals and cosmetics etc. Income of Rs.6,87,55,050/- declared in the return for A.Y. 2020-21 which was subjected to scrutiny in the assessment proceedings u/s.143(3) of the Act. Ld. Assessing Officer disallowed the claim of weighted deduction @150% at Rs.93,41,332/- for want of Form No.3CL as mandated u/s.35(2AB) of the Act. Further, assessee failed to get any relief before ld.CIT(A).

Now the assessee is in appeal before this Tribunal. Apart from challenging the disallowance of weighted deduction u/s.35(2AB) assessee raised additional ground stating that atleast the revenue expenditure incurred by the appellant on in-house research and depreciation on alleged capital expenditure ought to have been allowed u/s.35(1)(1) and 35(1)(iv) of the Act.

We notice that assessee failed to furnish Form No.3CL therefore weighted deduction u/s.35(2AB) of the Act cannot be allowed. However, alternate claim of the assessee is that the Revenue expenditure of Rs.34.98 lakh deserves to be allowed u/s.37(1) of the Act as genuineness of the expenditure has not been doubted. Similarly, for the Capital expenditure of Rs.27.29 lakh, prayer has been made that depreciation claim may be allowed for the year as per the applicable rates.

We find force in the contention of ld. Counsel for the assessee and considering the same, we deem it appropriate to restore the issue to the file of ld. Juri ictional Assessing Officer before whom assessee shall furnish the revised computation of income and also revised depreciation chart after including the capital expenditure of Rs.27.29 lakh in the list of Fixed Assets and ld. JAO shall examine these details and if the same are found to be correct then allow the claim of Revenue expenditure of Rs.34.98 lakh u/s.37(1) of the Act and further allow the depreciation u/s.32 for the capital expenditure incurred at Rs.27.29 lakh as per the applicable rates. Needless to mention that ld. JAO shall give reasonable opportunity of hearing to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “B” बेंच, 4. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,