“Section 35(3)(b)”
The decision most relied on for Section 35(3)(b) is CIT v. Dunlop Rubber Co. Ltd. (142 ITR 493), cited in 95 judgments on BharatTax.
Leading authorities on Section 35(3)(b)
Pure reimbursement of expenditure does not constitute income in the nature of royalty or fees for technical services, therefore eliminating the obligation to deduct tax at source.
The weighted deduction for scientific research expenditure under Section 35(2AB) is allowable, clarifying that the requirement for the prescribed authority to approve or quantify the expenditure from year to year became effective only from April 1, 2016, through amendments to Rule 6(7A)(b).
Disallowance under Section 40A(2)(b) is not maintainable when both the payer and payee are assessed at the maximum marginal rate, as it results in a revenue-neutral situation.
Expenditure approved by the DSIR in Form 3CL alone qualifies for weighted deduction under Section 35(2AB). The DSIR's decision on the correctness of expenditure under this section is final.
Interest paid on delayed remittances of service tax is compensatory in nature and not a penalty hit by the Explanation to Section 37(1) of the Income Tax Act, 1961, making it a allowable business expenditure.
Interest chargeable under section 201(1A) of the Income Tax Act is not penal in nature and therefore cannot be waived on the basis of intentional default or other grounds.
Expenditure on scientific research for weighted deduction must satisfy the conditions in section 35(2AB) and also the provisions of section 35(3)(b) of the Income Tax Act.
Reassessment proceedings initiated by an Assessing Officer who does not exercise their jurisdiction independently but acts at the behest of a superior authority are invalid due to the non-satisfaction of a condition precedent.
