SAHAJANAND TECHNOLOGIES PRIVATE LIMTED,SURAT vs. THE ACIT, CENTRAL CIRCLE-4, SURAT., SURAT

ITA 255/SRT/2025Status: DisposedITAT Surat23 September 2025AY 2018-19Bench: SHRI SANJAY GARG (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance on account of Section 35(2AB) should have been restricted to Rs. 12,42,434/-, being 50% of the unallowed revenue expenditure. The remaining revenue expenditure of Rs. 24,84,868/- was allowable under Section 35(1)(i). For the addition under Section 14A, the Tribunal noted that the assessee had not earned any exempt income, and following various High Court decisions, the disallowance was not sustainable.

What were the facts?

The assessee claimed a deduction of Rs. 4,50,37,302/- under Section 35(2AB) for scientific research expenditure. The Assessing Officer (AO) restricted the deduction based on the actual expenditure reported by the Ministry of Science and Technologies, leading to a disallowance of Rs. 37,27,302/-. The assessee also claimed a deduction under Section 14A for expenses related to exempt income.

What were the issues?

Whether the disallowance of deduction claimed under Section 35(2AB) for scientific research expenditure was justified, and whether the addition made under Section 14A for expenses relatable to exempt income was sustainable.

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 35(1)(i),Section 14A

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Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH

Hearing: 11/08/2025Pronounced: 23/09/2025

PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 17.01.2025 by the Commissioner of Income-tax (Appeals)-4, Surat [in short ‘Ld. CIT(A)’] for the Assessment Year (AY) 2018-19, which in turn arises out of assessment order passed by Assessing Officer u/s 143(3) r.w.s. 143(3A) r.w.s. 143(3B) of the Act dated 06.04.2021. Gr

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