DEPUTY COMMISSIONER OF INCOME TAX , CHENNAI vs. ASHOK LEYLAND LIMITED, CHENNAI

3. The Ld. CIT(A) erred in allowing the said deduction u/s 35(2AB) without 3. The Ld. CIT(A) erred in allowing the said deduction u/s 35(2AB) without 3. The Ld. CIT(A) erred in allowing the said deduction u/s 35(2AB) without giving an opportunity to the AO to verify as to whether the balance giving an opportunity to the AO to verify as to whether the balance giving an opportunity to the AO to verify as to whether the balance expenditure of Rs. 7.52 crores (R&D expenditure expenditure of Rs. 7.52 crores (R&D expenditure claimed by the assessee of claimed by the assessee of Rs. 21.98 crores (-) R&D expenditure certified by DSIR of Rs.14.46 crores) has ) R&D expenditure certified by DSIR of Rs.14.46 crores) has ) R&D expenditure certified by DSIR of Rs.14.46 crores) has been incurred for eligible R&D only. been incurred for eligible R&D only.

4. For these and other grounds that may be adduced at the time of hearing, it 4. For these and other grounds that may be adduced at the time of hearing, it 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the le is prayed that the order of the learned CIT(A) may be set aside and that of the arned CIT(A) may be set aside and that of the Assessing officer be restored. Assessing officer be restored.

3. At the outset, it is noted that there is a delay of ‘22’ days in filing of At the outset, it is noted that there is a delay of ‘22’ days in filing of At the outset, it is noted that there is a delay of ‘22’ days in filing of appeal and the Revenue has filed an application for condonation of delay. appeal and the Revenue has filed an application for condonation of delay. appeal and the Revenue has filed an application for condonation of delay.

4. The sole grievance of the Revenue in this appeal is against the The sole grievance of the Revenue in this appeal is against the The sole grievance of the Revenue in this appeal is against the action of the Ld. CIT(A) allowing normal deduction for the capital d. CIT(A) allowing normal deduction for the capital d. CIT(A) allowing normal deduction for the capital expenditure incurred at the approved R&D Facility u/s 35(1)(iv) of the expenditure incurred at the approved R&D Facility u/s 35(1)(iv) of the expenditure incurred at the approved R&D Facility u/s 35(1)(iv) of the Act, which had been disallowed by the AO u/s.35(2AB) of the Income Tax Act, which had been disallowed by the AO u/s.35(2AB) of the Income Tax Act, which had been disallowed by the AO u/s.35(2AB) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘). Act, 1961 (hereinafter referred to as ‘the Act‘).

5. The brief facts as noted are that, the assessee facts as noted are that, the assessee company company had filed the Return of Income (RoI) (RoI) for the AY 2014-15 on 28.11.2012 declaring 15 on 28.11.2012 declaring loss at Rs.(-) 762,77,55,971/ 762,77,55,971/-. Subsequently, the case was selected for . Subsequently, the case was selected for /Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. scrutiny under CASS and notice u/s. tiny under CASS and notice u/s.143(2) dated 10.09.201 143(2) dated 10.09.2015 was issued to the assessee, the income was assessed income at Rs.406,76,80,822 to the assessee, the income was assessed income at Rs.406,76,80,822 to the assessee, the income was assessed income at Rs.406,76,80,822/- vide order u/s.143(3) of the Act dated 30.12.2016. 143(3) of the Act dated 30.12.2016. In the original In the original assessment, the assessee was not able to furnish the copy of Form 3CL assessment, the assessee was not able to furnish the copy of Form 3CL assessment, the assessee was not able to furnish the copy of Form 3CL issued by DSIR and therefore the AO issued by DSIR and therefore the AO had disallowed the weighted had disallowed the weighted component of the deduction claimed u/s 35(2AB) of the Act, but component of the deduction claimed u/s 35(2AB) of the Act, but component of the deduction claimed u/s 35(2AB) of the Act, but otherwise allowed normal deduction u/s 35(1)(i)/35(1)(iv) of the Act in otherwise allowed normal deduction u/s 35(1)(i)/35(1)(iv) of the Act in otherwise allowed normal deduction u/s 35(1)(i)/35(1)(iv) of the Act in respect of both the revenue and capital expenditure incurred at the respect of both the revenue and capital expenditure incurred at the respect of both the revenue and capital expenditure incurred at the approved R&D facility. La approved R&D facility. Later on, the case of the assessee was reopened ter on, the case of the assessee was reopened by issue of notice u/s 148 of the Act and the by issue of notice u/s 148 of the Act and the assessment was completed assessment was completed u/s.143(3) r.w.s. 147 of the u/s.143(3) r.w.s. 147 of the Act vide order dated 09.12.2019 09.12.2019 assessing total loss at Rs. Rs.(-) 301,90,10,983/- in in which which several several additions/disallowances were made, which llowances were made, which inter alia included disallowance included disallowance of the normal deduction of the normal deduction of Rs.21,98,62,276/- originally allowed in respect originally allowed in respect of capital expenditure incurred at approved scientific R&D facility incurred at approved scientific R&D facility incurred at approved scientific R&D facility.

6. Aggrieved, the assessee preferred an appeal befor Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), e the Ld. CIT(A), who partly allowed the appeal of the assessee and who partly allowed the appeal of the assessee and inter alia inter alia deleted the disallowance which is impugned before us. Being disallowance which is impugned before us. Being aggrieved by the action ggrieved by the action of the Ld.CIT(A), the Revenue is now in appeal before us. of the Ld.CIT(A), the Revenue is now in appeal before us.

7. Heard both the parties. It was brought to our notice that, the Heard both the parties. It was brought to our notice that, the Heard both the parties. It was brought to our notice that, the assessee had claimed weighted deduction u/s 35(2AB) of the Act in assessee had claimed weighted deduction u/s 35(2AB) of the Act in assessee had claimed weighted deduction u/s 35(2AB) of the Act in /Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::4 ::

relation to the expenditure incurred at their approved R&D facility which relation to the expenditure incurred at their approved R&D facility which relation to the expenditure incurred at their approved R&D facility which worked out to Rs.446.98 crores [200% of Rs.223.49 cro worked out to Rs.446.98 crores [200% of Rs.223.49 crores] i.e., 200% of res] i.e., 200% of both the revenue & capital expenditure of Rs. both the revenue & capital expenditure of Rs.201.51 crores and Rs. crores and Rs.21.98 crores respectively. Though the AO in the original assessment held that, crores respectively. Though the AO in the original assessment held that, crores respectively. Though the AO in the original assessment held that, in absence of Form 3CL, the weighted deduction u/s 35(2AB) was not in absence of Form 3CL, the weighted deduction u/s 35(2AB) was not in absence of Form 3CL, the weighted deduction u/s 35(2AB) was not allowable; but he allowed allowable; but he allowed normal deduction i.e. 100% in relation to both normal deduction i.e. 100% in relation to both the revenue & capital expenditure incurred for scientific research in terms the revenue & capital expenditure incurred for scientific research in terms the revenue & capital expenditure incurred for scientific research in terms of Section 35(1) of the Act. This action of the AO’s predecessor of Section 35(1) of the Act. This action of the AO’s predecessor of Section 35(1) of the Act. This action of the AO’s predecessor inter alia allowing normal deduction for the capital expenditure of allowing normal deduction for the capital expenditure of Rs.21.98 crores Rs.21.98 crores incurred for scientific research was subsequently disputed by the AO in incurred for scientific research was subsequently disputed by the AO in incurred for scientific research was subsequently disputed by the AO in the impugned reassessment, which was disallowed in the impugned the impugned reassessment, which was disallowed in the impugned the impugned reassessment, which was disallowed in the impugned reassessment order. We find that, before the Ld. CIT(A), the assessee reassessment order. We find that, before the Ld. CIT(A), the assessee reassessment order. We find that, before the Ld. CIT(A), the assessee pointed out that, it had later on pointed out that, it had later on received the Form 3CL and had received the Form 3CL and had accordingly filed rectification application u/s 154 of the Act for allowing accordingly filed rectification application u/s 154 of the Act for allowing accordingly filed rectification application u/s 154 of the Act for allowing the weighted 35(2AB) of the Act. Subsequent to the order passed by the the weighted 35(2AB) of the Act. Subsequent to the order passed by the the weighted 35(2AB) of the Act. Subsequent to the order passed by the Ld. CIT(A), the AO is also found to have acceded to the assessee’s Ld. CIT(A), the AO is also found to have acceded to the assessee’s Ld. CIT(A), the AO is also found to have acceded to the assessee’s rectification application, and he is noted to have allowed the weighted on application, and he is noted to have allowed the weighted on application, and he is noted to have allowed the weighted deduction u/s 35(2AB) of the Act to the extent of the amount certified in deduction u/s 35(2AB) of the Act to the extent of the amount certified in deduction u/s 35(2AB) of the Act to the extent of the amount certified in Form 3CL i.e. Rs.424.26 crores (200% of Rs.212.13 crores). The details Form 3CL i.e. Rs.424.26 crores (200% of Rs.212.13 crores). The details Form 3CL i.e. Rs.424.26 crores (200% of Rs.212.13 crores). The details thereof are noted to be as thereof are noted to be as follows: - /Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::5 ::

(Amount Rs Amount Rs. in crores)

Particulars Amount Amount incurred incurred towards towards Amount Remaining amount Remaining amount scientific research at approved scientific research at approved certified by not not eligible eligible for for R&D Facility claimed as weighted R&D Facility claimed as weighted DSIR in Form weighted weighted deduction u/s 35(2AB) deduction u/s 35(2AB) 3CL deduction deduction Revenue 201.51 198.32 3.19 Capital 21.98 14.81 7.57 223.49 212.13

8. Though there were were infirmities in the manner of calculation in the infirmities in the manner of calculation in the rectification order, in as much as, the AO is apparently found to have rectification order, in as much as, the AO is apparently found to have rectification order, in as much as, the AO is apparently found to have allowed excessive deduction u/s 35(2AB) of the Act viz., instead of allowed excessive deduction u/s 35(2AB) of the Act viz., instead of allowed excessive deduction u/s 35(2AB) of the Act viz., instead of allowing only the further weighted component of deduction of 100%, o allowing only the further weighted component of deduction of 100%, o allowing only the further weighted component of deduction of 100%, over the normal deduction allowed in original assessment, the AO has allowed the normal deduction allowed in original assessment, the AO has allowed the normal deduction allowed in original assessment, the AO has allowed entire weighted deduction of 200%. Be that as it may, the fact however entire weighted deduction of 200%. Be that as it may, the fact however entire weighted deduction of 200%. Be that as it may, the fact however remains that, there is no dispute in principle between the parties before remains that, there is no dispute in principle between the parties before remains that, there is no dispute in principle between the parties before us regarding the allowability of we us regarding the allowability of weighted deduction u/s 35(2AB) in respect ighted deduction u/s 35(2AB) in respect of expenditure to the extent of Rs.212.13 crores [revenue of expenditure to the extent of Rs.212.13 crores [revenue of expenditure to the extent of Rs.212.13 crores [revenue – Rs.198.32 crores & capital – Rs.14.81 crores] as allowed by the AO in the Rs.14.81 crores] as allowed by the AO in the Rs.14.81 crores] as allowed by the AO in the rectification order u/s 154 of the Act which rectification order u/s 154 of the Act which inter alia inter alia includes the weighted deduction for the capital expenditure to the extent of Rs.14.81 ction for the capital expenditure to the extent of Rs.14.81 ction for the capital expenditure to the extent of Rs.14.81 crores (wrongly mentioned as Rs.14.46 crores in the grounds of appeal) (wrongly mentioned as Rs.14.46 crores in the grounds of appeal) (wrongly mentioned as Rs.14.46 crores in the grounds of appeal)

incurred by the assessee towards scientific research at its approved R& incurred by the assessee towards scientific research at its approved R& incurred by the assessee towards scientific research at its approved R&D facility, as certified by the DSIR in their Form 3CL. Accordingly the action facility, as certified by the DSIR in their Form 3CL. Accordingly the action facility, as certified by the DSIR in their Form 3CL. Accordingly the action of the Ld. CIT(A) deleting the disallowance of capital expenditure incurred of the Ld. CIT(A) deleting the disallowance of capital expenditure incurred of the Ld. CIT(A) deleting the disallowance of capital expenditure incurred for scientific research to the extent of Rs.14.81 crores, in light of Form for scientific research to the extent of Rs.14.81 crores, in light of Form for scientific research to the extent of Rs.14.81 crores, in light of Form /Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::6 ::

3CL as well as subsequent 3CL as well as subsequent rectification order passed by the AO, does not rectification order passed by the AO, does not call for any interference. call for any interference.

“4.6 We now come to the alternate claim raised by the assessee for We now come to the alternate claim raised by the assessee for We now come to the alternate claim raised by the assessee for deduction of the capital R& deduction of the capital R&D expenditure of Rs.100,21,22,016/ D expenditure of Rs.100,21,22,016/- u/s 35(1)(iv) of the Act. It is noted that, the lower authorities have denied 35(1)(iv) of the Act. It is noted that, the lower authorities have denied 35(1)(iv) of the Act. It is noted that, the lower authorities have denied this alternate claim on the ground that, no evidence was provided by the this alternate claim on the ground that, no evidence was provided by the this alternate claim on the ground that, no evidence was provided by the assessee in relation thereto. Before adverting to the facts of the pr assessee in relation thereto. Before adverting to the facts of the pr assessee in relation thereto. Before adverting to the facts of the present case, it is noted that Section 35(1)(iv) of the Act, provides that any case, it is noted that Section 35(1)(iv) of the Act, provides that any case, it is noted that Section 35(1)(iv) of the Act, provides that any expenditure of a capital nature on scientific research, related to the expenditure of a capital nature on scientific research, related to the expenditure of a capital nature on scientific research, related to the business of the assessee shall be admissible as deduction in terms of business of the assessee shall be admissible as deduction in terms of business of the assessee shall be admissible as deduction in terms of provision of Section 35(2) of the Act. provision of Section 35(2) of the Act. It is further noted that sub It is further noted that sub-clause (ia) of Section 35(2) of the Act provides that, where the capital (ia) of Section 35(2) of the Act provides that, where the capital (ia) of Section 35(2) of the Act provides that, where the capital expenditure has been incurred after 31.03.1967, the entire value of expenditure has been incurred after 31.03.1967, the entire value of expenditure has been incurred after 31.03.1967, the entire value of capital expenditure is eligible for deduction from the profits of the capital expenditure is eligible for deduction from the profits of the capital expenditure is eligible for deduction from the profits of the business. Hence, in our considered view therefore, an assessee is , in our considered view therefore, an assessee is , in our considered view therefore, an assessee is entitled for normal deduction i.e. 100% of the capital expenditure entitled for normal deduction i.e. 100% of the capital expenditure entitled for normal deduction i.e. 100% of the capital expenditure incurred at its R&D facility in terms of Section 35(1)(iv) read with incurred at its R&D facility in terms of Section 35(1)(iv) read with incurred at its R&D facility in terms of Section 35(1)(iv) read with /Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::7 ::

Section 35(2)(ia) of the Act, irrespective whether such capital Section 35(2)(ia) of the Act, irrespective whether such capital Section 35(2)(ia) of the Act, irrespective whether such capital expenditure is eligible for weighted deduction u/s 35(2AB) of the Act or diture is eligible for weighted deduction u/s 35(2AB) of the Act or diture is eligible for weighted deduction u/s 35(2AB) of the Act or not.

4.7 Our view finds support from the decision of the Hon'ble jurisdictional 4.7 Our view finds support from the decision of the Hon'ble jurisdictional 4.7 Our view finds support from the decision of the Hon'ble jurisdictional Madras High Court in the case of CIT vs Rajapalayam Mills Ltd. (265 Madras High Court in the case of CIT vs Rajapalayam Mills Ltd. (265 Madras High Court in the case of CIT vs Rajapalayam Mills Ltd. (265 Taxman 209). In the decided case, the as Taxman 209). In the decided case, the assessee had claimed deduction sessee had claimed deduction u/s 35(2AB) of the Act in respect of the expenditure, both revenue and u/s 35(2AB) of the Act in respect of the expenditure, both revenue and u/s 35(2AB) of the Act in respect of the expenditure, both revenue and capital, incurred at its R&D facility. Since the assessee was unable to capital, incurred at its R&D facility. Since the assessee was unable to capital, incurred at its R&D facility. Since the assessee was unable to fulfill the conditions prescribed in Section 35(2AB) of the Act, the claim fulfill the conditions prescribed in Section 35(2AB) of the Act, the claim fulfill the conditions prescribed in Section 35(2AB) of the Act, the claim for weighted deduction was denied to it. The assessee had alternatively ted deduction was denied to it. The assessee had alternatively ted deduction was denied to it. The assessee had alternatively claimed normal deduction us 35(1)(i) and 35(1)(iv) of the Act in respect claimed normal deduction us 35(1)(i) and 35(1)(iv) of the Act in respect claimed normal deduction us 35(1)(i) and 35(1)(iv) of the Act in respect of the revenue and capital expenditure respectively. On appeal, this of the revenue and capital expenditure respectively. On appeal, this of the revenue and capital expenditure respectively. On appeal, this tribunal is noted to have upheld the allowance of d tribunal is noted to have upheld the allowance of deduction at normal eduction at normal rate u/s 35(1) of the Act. On further appeal by the Revenue, we find rate u/s 35(1) of the Act. On further appeal by the Revenue, we find rate u/s 35(1) of the Act. On further appeal by the Revenue, we find that the Hon'ble High Court upheld the order of this Tribunal, by holding that the Hon'ble High Court upheld the order of this Tribunal, by holding that the Hon'ble High Court upheld the order of this Tribunal, by holding as under:

"2. The present Appeal has been filed by the Revenue under "2. The present Appeal has been filed by the Revenue under "2. The present Appeal has been filed by the Revenue under Section 260 Section 260-A of the Income Tax Act by raising the following me Tax Act by raising the following purported substantial questions of law arising from the order purported substantial questions of law arising from the order purported substantial questions of law arising from the order passed by the Income Tax Appellate Tribunal dated 31.7.2008, by passed by the Income Tax Appellate Tribunal dated 31.7.2008, by passed by the Income Tax Appellate Tribunal dated 31.7.2008, by which the learned Tribunal upheld the order of the learned which the learned Tribunal upheld the order of the learned which the learned Tribunal upheld the order of the learned Commissioner of Income Tax (Appeals Commissioner of Income Tax (Appeals) and held that the ) and held that the expenditure incurred by the Assessee on Scientific Research was expenditure incurred by the Assessee on Scientific Research was expenditure incurred by the Assessee on Scientific Research was not entitled to weighted deduction of 1.5 times under Section not entitled to weighted deduction of 1.5 times under Section not entitled to weighted deduction of 1.5 times under Section 35(2AB) of the Act as the Project in question was not duly 35(2AB) of the Act as the Project in question was not duly 35(2AB) of the Act as the Project in question was not duly approved by the Competent Authority, however, the A approved by the Competent Authority, however, the A approved by the Competent Authority, however, the Assessee, was entitled to normal deduction of 100% of expenditure incurred only entitled to normal deduction of 100% of expenditure incurred only entitled to normal deduction of 100% of expenditure incurred only under Section 35(1)(i) of the Act. under Section 35(1)(i) of the Act.

3.2 After considering the submissions I find that the assessing ter considering the submissions I find that the assessing ter considering the submissions I find that the assessing officer has rightly rejected the claim of the appellant u/s. 32(2AB) officer has rightly rejected the claim of the appellant u/s. 32(2AB) officer has rightly rejected the claim of the appellant u/s. 32(2AB) as there was no approval from the prescribed authority as on the as there was no approval from the prescribed authority as on the as there was no approval from the prescribed authority as on the date of completion of assessment. Having regard to alternative date of completion of assessment. Having regard to alternative date of completion of assessment. Having regard to alternative claim, I find that the assessing officer had no occasion to consider laim, I find that the assessing officer had no occasion to consider laim, I find that the assessing officer had no occasion to consider the claim of the appellant. In the circumstances, the assessing the claim of the appellant. In the circumstances, the assessing the claim of the appellant. In the circumstances, the assessing officer is directed to consider the claim of deduction u/s. 35(1)(i) officer is directed to consider the claim of deduction u/s. 35(1)(i) officer is directed to consider the claim of deduction u/s. 35(1)(i) for Rs. 55,12,558/ for Rs. 55,12,558/- representing R&D Revenue Expenditur representing R&D Revenue Expenditure and deduction u/s. 35(1)(iv) for Rs. 46,387/ deduction u/s. 35(1)(iv) for Rs. 46,387/- representing expenditure representing expenditure incurred for the purchase of Camera used in R&D unit." incurred for the purchase of Camera used in R&D unit." incurred for the purchase of Camera used in R&D unit."

/Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::8 ::

"4. After considering the rival submission carefully, we agree that "4. After considering the rival submission carefully, we agree that "4. After considering the rival submission carefully, we agree that Sec.35(1) as well as Sec.35(2AB) deal with the same expenditure Sec.35(1) as well as Sec.35(2AB) deal with the same expenditure Sec.35(1) as well as Sec.35(2AB) deal with the same expenditure i.e., scientific expenditure consisting of revenue and capital i.e., scientific expenditure consisting of revenue and capital i.e., scientific expenditure consisting of revenue and capital expenditure and only difference is expenditure and only difference is that Sect.35(1) provides for that Sect.35(1) provides for allowance at normal rate i.e., actual expenditure whereas allowance at normal rate i.e., actual expenditure whereas allowance at normal rate i.e., actual expenditure whereas Sec.35(2AB) allows deduction to be claimed at weighted rate of Sec.35(2AB) allows deduction to be claimed at weighted rate of Sec.35(2AB) allows deduction to be claimed at weighted rate of 150% subject to fulfilment of certain conditions. Therefore, we find 150% subject to fulfilment of certain conditions. Therefore, we find 150% subject to fulfilment of certain conditions. Therefore, we find nothing wrong with the directions of nothing wrong with the directions of the CIT(Appeals) to the the CIT(Appeals) to the Assessing Officer to allow normal deduction under Sec.35(1) Assessing Officer to allow normal deduction under Sec.35(1) Assessing Officer to allow normal deduction under Sec.35(1) particularly in view of the fact that the Assessing Officer himself particularly in view of the fact that the Assessing Officer himself particularly in view of the fact that the Assessing Officer himself has allowed deduction for the Asst. Year 2005 has allowed deduction for the Asst. Year 2005-06."

"(i) Whether, on the f "(i) Whether, on the facts and circumstances of the case, the acts and circumstances of the case, the Tribunal was right in law in entertaining a change of claim of Tribunal was right in law in entertaining a change of claim of Tribunal was right in law in entertaining a change of claim of deduction by the assessee from 35(2AB) to 35(1) of the Income deduction by the assessee from 35(2AB) to 35(1) of the Income deduction by the assessee from 35(2AB) to 35(1) of the Income Tax Act?

(ii) Whether, on the facts and circumstances of the case, the (ii) Whether, on the facts and circumstances of the case, the (ii) Whether, on the facts and circumstances of the case, the Tribunal was right i Tribunal was right in granting relief under Section 35(1) when the n granting relief under Section 35(1) when the Assessee has not produced the relevant approval from the Assessee has not produced the relevant approval from the Assessee has not produced the relevant approval from the prescribed authorities for the claim of deduction?" prescribed authorities for the claim of deduction?"

Appellate Authorities have rightly allowed the claim under Section Appellate Authorities have rightly allowed the claim under Section Appellate Authorities have rightly allowed the claim under Section 35(1)(i) of the Act. The Assessee has not preferred any Appeal 35(1)(i) of the Act. The Assessee has not preferred any Appeal 35(1)(i) of the Act. The Assessee has not preferred any Appeal against that finding and therefore, the question of approval by the that finding and therefore, the question of approval by the that finding and therefore, the question of approval by the Competent Authority for making such claim becomes irrelevant. Competent Authority for making such claim becomes irrelevant. Competent Authority for making such claim becomes irrelevant. Therefore, we do not find any substantial question of law to be Therefore, we do not find any substantial question of law to be Therefore, we do not find any substantial question of law to be arising in the present Appeal. arising in the present Appeal.

No order as to costs. A copy of this judgment may be sent to the No order as to costs. A copy of this judgment may be sent to the No order as to costs. A copy of this judgment may be sent to the Assessee forthwith." Assessee forthwith."

4.8 In view of the above decision supra, the legal position which 4.8 In view of the above decision supra, the legal position which 4.8 In view of the above decision supra, the legal position which emerges is that, the denial of weighted deduction u/s 35(2AB) will not emerges is that, the denial of weighted deduction u/s 35(2AB) will not emerges is that, the denial of weighted deduction u/s 35(2AB) will not disable the assessee from claiming normal deduction for the said R&D disable the assessee from claiming normal deduction for the said R&D disable the assessee from claiming normal deduction for the said R&D expenditure, both revenue & capital, u/s 35(1)(i) and 35(1)(iv) of the expenditure, both revenue & capital, u/s 35(1)(i) and 35(1)(iv) of the expenditure, both revenue & capital, u/s 35(1)(i) and 35(1)(iv) of the Act respectively. Now reverting back to the Act respectively. Now reverting back to the facts of the present case, it facts of the present case, it is noted that the assessee had furnished the details of the expenditure is noted that the assessee had furnished the details of the expenditure is noted that the assessee had furnished the details of the expenditure incurred at its approved in incurred at its approved in-house R&D facility before the lower house R&D facility before the lower authorities, which was inter alia included in the audited accounts authorities, which was inter alia included in the audited accounts authorities, which was inter alia included in the audited accounts certified by the statut certified by the statutory auditor in Form 3CLA. It was brought to our ory auditor in Form 3CLA. It was brought to our notice that the assessee vide letter dated 05.03.2021 had furnished the notice that the assessee vide letter dated 05.03.2021 had furnished the notice that the assessee vide letter dated 05.03.2021 had furnished the Form 3CLA, which contained the details of R&D expenditure, including Form 3CLA, which contained the details of R&D expenditure, including Form 3CLA, which contained the details of R&D expenditure, including expenditure of capital nature, consolidated claim statement, detail expenditure of capital nature, consolidated claim statement, detail expenditure of capital nature, consolidated claim statement, details of disclosure of R&D expenditure in the notes to audited financial disclosure of R&D expenditure in the notes to audited financial disclosure of R&D expenditure in the notes to audited financial statements along with a reconciliation statement between the amount statements along with a reconciliation statement between the amount statements along with a reconciliation statement between the amount certified in Form 3CLA and the figures reported in notes to audited certified in Form 3CLA and the figures reported in notes to audited certified in Form 3CLA and the figures reported in notes to audited financial statements. Having perused these details, financial statements. Having perused these details, we find that the we find that the details evidencing incurrence of capital expenditure at the approved in details evidencing incurrence of capital expenditure at the approved in details evidencing incurrence of capital expenditure at the approved in- house R&D facility was duly disclosed in the notes to the audited house R&D facility was duly disclosed in the notes to the audited house R&D facility was duly disclosed in the notes to the audited financial statements and further the statutory auditor had verified and financial statements and further the statutory auditor had verified and financial statements and further the statutory auditor had verified and certified the same being rel certified the same being relatable to scientific research in Form 3CLA. atable to scientific research in Form 3CLA. According to us therefore, these contemporaneous evidences sufficiently According to us therefore, these contemporaneous evidences sufficiently According to us therefore, these contemporaneous evidences sufficiently establish that the capital expenditure of Rs.100,21,22,016/ establish that the capital expenditure of Rs.100,21,22,016/ establish that the capital expenditure of Rs.100,21,22,016/- was incurred in relation to scientific research and was therefore eligible for incurred in relation to scientific research and was therefore eligible for incurred in relation to scientific research and was therefore eligible for deduction u/s 35(1)(iv) of the Act. Hence, the order of the lower deduction u/s 35(1)(iv) of the Act. Hence, the order of the lower deduction u/s 35(1)(iv) of the Act. Hence, the order of the lower authorities to that extent stands reversed. 4.9 In view of our above authorities to that extent stands reversed. 4.9 In view of our above authorities to that extent stands reversed. 4.9 In view of our above findings therefore, we direct the AO to further allow normal deduction findings therefore, we direct the AO to further allow normal deduction findings therefore, we direct the AO to further allow normal deduction for the capital R&D expenditure of Rs. 100,21,22,0 for the capital R&D expenditure of Rs. 100,21,22,016/- u/s 35(1)(iv) of u/s 35(1)(iv) of the Act, and resultantly delete disallowance to the extent of the Act, and resultantly delete disallowance to the extent of the Act, and resultantly delete disallowance to the extent of Rs.70,14,85,411/ Rs.70,14,85,411/- (Rs.100,21,22,016/- minus Rs.30,06,36,605/ minus Rs.30,06,36,605/-). This ground therefore stands partly allowed.” ground therefore stands partly allowed.

/Chny/2024 (AY 2014-15) M/s. Ashok Leyland Ltd. M/s. Ashok Leyland Ltd. ::10 ::

Order pronounced on the 02nd day of May, 2025, in Chennai. Order pronounced on the , in Chennai.