DEPUTY COMMISSIONER OF INCOME TAX (LTU), CIRCLE- 1, BANGALORE vs. M/S. KENNAMETAL INDIA LIMITED ( EARLIER KNOWN AS WIDE (INDIA) LIMITED), BANGALORE

ITA 2553/BANG/2019Status: DisposedITAT Bangalore29 April 2022AY 2001-026 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a condition for deduction under Section 35(1) is an agreement with a prescribed authority for cooperation in R&D and audit. This crucial fact was not examined by the lower authorities. Therefore, the matter was restored to the AO for fresh examination.

What were the facts?

The assessee claimed deduction under Section 35(1)(iv) for capital expenditure on machinery used for R&D. The AO disallowed the claim, stating the machines were used for commercial production and not solely for R&D. The CIT(A) deleted the disallowance.

What were the issues?

Whether the machinery was acquired and used for the purpose of scientific research as required by Section 35(1)(iv), and whether an agreement with a prescribed authority was in place.

Which sections of the Income-tax Act were involved?

Section 35(1)(iv),Section 35(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI B.R. BASKARAN

For Appellant: Shri S. Parthasarathi, A.R
For Respondent: Shri T. RoumuanPaite, D.R
Hearing: 16.03.2022Pronounced: 29.04.2022

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The revenue has filed this appeal challenging the order dated 29.10.2019 passed by ld. CIT(A)-4, Bengaluru and it relates to the assessment year 2001-02. The grounds of appeal urged by the revenue read as under:- 1 “The Order of the Ld. CIT(A), in so far as it is prejudicial to the interest of the Revenue, is opposed to law and the facts and circumstances of the case.

2.

Whether the Hon'ble CIT(A) is correct in allowing the assessee's claim in respect of Capital Expenditure of Rs.6,61,92,319/- u/s 35(1)(iv) of the IT Act though the machines were purchased for

The order continues below.

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