DCIT CIR 2(1)(1), MUMBAI vs. L & T CUTTING TOOLS LTD, MUMBAI

O R D E R PER G S PANNU, A. M: This is an appeal filed by the revenue against the order of the ld.CIT(A)-5, Mumbai, dated 27.11.2015 for the assessment year 2011-12 which is arising out of assessment order passed by the AO u/s 143(3) of the Income Tax Act, 1961, dated 6.3.2014. 2. In this appeal, the Revenue has raised the following grounds: “

1. The order of the CIT(A) is opposed to law and facts of the case;

3. At the time of hearing, the ld.DR referred to the assessment order and contended that the AO has disallowed an expenditure of Rs.47,84,618/- debited in the profit and loss account under the head Research and Development Expenses. The ld. DR drew the attention of the Bench to the discussion made by the AO in para 5 of the assessment order. As per the AO, the assessee had only offered general explanation in respect of the claim of the impugned expenses and that there were no evidence in support of the claim that any Research and Development activities were carried out. The AO has also referred to the stand of the assessing authority for the assessment year 2010-11 also, wherein the similar expenses were disallowed in the absence of evidence of carrying out any Research and Development activities. The aforesaid disallowance has since been examined by the ld.CIT(A) who has directed the AO to verify as to whether the items contained in the impugned expenses of Rs.47,84,618/- were revenue in nature or not. The ld. CIT(A) has directed the AO to allow the expenditure to the extent it is found to be of revenue in nature. The ld. CIT(A) referred to the decision of CIT(A) for the assessment year 2010-11 which was on similar lines. Against such a decision of ld.CIT(A), the Revenue is in appeal before us.

3 /M um /201 6 4. At the time of hearing, the ld.AR-assessee pointed out that the lead year of dispute was the assessment year 2009-10 and the matter had travelled to the Tribunal. The Tribunal vide its order passed in assessee’s own case of ACIT V/s M/s Tractor Engineers Ltd in ITA No.1048 and 5438/Mum/2014(AY-2009-10 and 2010-11) dated 25.10.2016 respectively has restored the matter back to the file of the AO to decide the issue afresh and in accordance with law. The ld. AR also referred to the decision of the Tribunal in assessee’s own case in ITA No.2855/Mum/2017(AY-2012-13) dated 1.9.2017, wherein also the direction of the ld. CIT(A) to the AO to examine the issue afresh has been affirmed. In this view of the matter, it has been submitted that the decision of the ld.CIT(A) to restore the matter back to the file of the AO deserves to be affirmed.