RA CHEM PHARMA LIMITED, HYDERABAD,HYDERABAD vs. ITO, WARD-3(2), HYDERABAD, HYDERABAD

ITA 65/HYD/2017Status: DisposedITAT Hyderabad08 June 2018AY 2012-1314 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that the R&D expenses, which provided enduring benefit over five years, were allowable as deferred revenue expenditure, especially considering the principle of consistency. The revenue's appeal was dismissed.

What were the facts?

The assessee company incurred research and development expenses which it claimed as deferred revenue expenditure. The Assessing Officer disallowed this claim, but the CIT(A) allowed it based on accounting principles and consistency. The revenue appealed against this decision.

What were the issues?

Whether research and development expenses, providing enduring benefit, can be treated as deferred revenue expenditure and allowed as a deduction. Whether the principle of consistency should be applied in allowing such expenditure.

Which sections of the Income-tax Act were involved?

Section 32,Section 35(1),Section 35D,Section 35DD,Section 37

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCH ‘B, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri S. Rama Rao
For Respondent: Shri R. Mohan Reddy
Hearing: 04/06/2018Pronounced: 08/06/2018

PER S. RIFAUR RAHMAN, AM:

ITA Nos. 65/Hyd/2017 and 49/Hyd/2017 are cross appeals filed by the assessee as well as revenue and ITA No. 48/Hyd/2017 filed by the revenue for AY 2010-11. As identical issues are involved in these appeals, they were clubbed and heard together and therefore we find it convenient to pass a consolidated order. RA Chem Pharma Ltd., Hyd.

ITA No. 65/Hyd/2017 by the assessee for AY 2012-13

2.

In this appeal, the assessee has raised the following grounds of appeal:

1.

Unexplained Investments - Di

The order continues below.

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