← All Phrases

“R&D expenditure”

Business ExpensesSection 35(2AB)Section 35(2AB)252 judgments

The decision most relied on for R&D expenditure is CIT v. Claris Lifesciences Ltd. (326 ITR 251), cited in 196 judgments on BharatTax.

Leading authorities on R&D expenditure

CIT v. Claris Lifesciences Ltd.
326 ITR 251 · 2010 · High Court
196
citing judgments

If approval from the Department of Scientific and Industrial Research (DSIR) for an in-house R&D centre is granted during the previous year, the assessee is entitled to claim weighted deduction under section 35(2AB) for the entire expenditure incurred during that year.

CIT v. Microlabs Ltd.
383 ITR 490 · 2016 · High Court
175
citing judgments

If an assessee possesses interest-free funds exceeding investments in tax-free securities, it is presumed that investments are made from these own funds, precluding disallowance of interest expenditure under Section 14A read with Rule 8D(2)(ii). Additionally, weighted deduction under Section 35(2AB) is computed on the gross expenditure incurred, not net expenditure after reducing income earned.

CIT v. Sadan Vikas (India) Ltd.
335 ITR 117 · 2011 · High Court
112
citing judgments

Weighted deduction under Section 35(2AB) is allowable for R&D expenditure incurred even if the approval from the DSIR is granted in a subsequent assessment year, provided the application for approval was made in time. The assessee is entitled to the deduction if the approval is based on verification of details submitted.

PCIT v. Maruti Suzuki India Ltd.
397 ITR 681 · 2017 · High Court
84
citing judgments

For claiming weighted deduction under section 35(2AB), the existence of recognition for a Research and Development (R&D) Centre is relevant, not necessarily the date of approval or recognition.

Zandu Pharmaceuticals Works Ltd. v. CIT
350 ITR 366 · 2013 · High Court
68
citing judgments

Expenses, including scientific research or head office expenses, cannot be allocated to units eligible for deductions under sections 80IB or 80IC unless there is a clear nexus between the expenditure and the specific eligible unit for computing the deduction.

Cummins India Ltd. v. DCIT
96 Taxmann.com 576 · 2018 · ITAT
67
citing judgments

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).

CIT v. Cadila Healthcare Ltd.
31 Taxmann.com 300 · 2013 · High Court
65
citing judgments

Section 35(2AB), an incentive provision, allows weighted deduction for expenditure 'on in-house research or development facility' even if related activities like clinical trials are conducted externally, provided they are for the in-house research. This requires a liberal interpretation of the provision.

Sun Pharmaceutical Industries Ltd. v. Pr.CIT
162 ITD 484 · 2017 · ITAT
47
citing judgments

The approval of an in-house R&D centre through Form 3CM is the primary document for claiming weighted deduction under Section 35(2AB) for scientific research expenditure. The case clarifies the significance of this form and the role of the prescribed authority (DSIR) in the approval process.

Judgments citing R&D expenditure

DCIT, Kolkata vs. Himadri Speciality Chemical Limited, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 2223/KOL/2025[2012-13]Status: DisposedITAT Kolkata17 Feb 2026AY 2012-13

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri S.K. Tulsiyan&For Respondent: Shri Praveen Kishore, DR
Section 115JSection 92C

Research, Govt. of India (DSIR) vide letter dated 29/03/2011 and claimed weighted deduction u/s.35(2AB) of the Act. In the reconciliation statement of R & D Expenditure drawn by the appellant for tax computation purposes, the appellant had shown item-wise expenditure on revenue account as well as on capital account

Unilever India Exports Limited, Mumbai vs. Deputy Commissioner of Income-Tax Central Circle - 5(2), Mumbai

In the result, both the appeals of the assessee for Assessment Years 2015–16 and 2016–17 are allowed

ITA 4157/MUM/2025[2016-17]Status: DisposedITAT Mumbai12 Feb 2026AY 2016-17

Bench: Shri Amit Shukla& Shri Makarand Vasant Mahadeokar & Unilever India Dcit Central Exports Limited, Circle-5(2), Unilever House, B. D. Vs. Room No. 427, 4Th Sawant Marg, Floor, Kautilya Chakala, Andheri Bhawan, C-41 To C- East, Sahar P & T 43, G Block, Bandra Colony, S. O. Kurla Complex, Mumbai-400 099 Bandra (East), Mumbai- 400 051. Pan/Gir No. Aaaci0991D (Applicant) (Respondent) Assessee By Ms. Karishma Phatarphekara/W Shri Harsh Shah & Shri Shreyas Sardesai, Ld. Ars Revenue By Shri Pankaj Kumar, Ld. Dr Date Of Hearing 13.01.2026 Date Of Pronouncement 12.02.2026

Section 143(3)Section 144C(13)Section 144C(5)Section 254

scientific search process: - Databases used: Prowess and CapitalinePlus - Manufacturing sales > 75% - Positive net worth filter - Minimum sales threshold - AMP expenditure filter (< 3%) - R&D expenditure filter (< 3%) 57. The rationale for AMP and R&D filters has been clearly explained in the submissions, namely that a contract manufacturer, supplying goods ... 35th Percentile 20.12% Median 21.78% 65th Percentile 23.87% 74. It was pointed out that these companies, such as Dabur India Limited, incur substantial R&D expenditure and own brands. The learned AR submitted that the Non-AE segment economically resembles such entrepreneurial operations, as reflected by its high margins

Unilever India Exports Limited, Mumbai vs. Deputy Commissioner of Income-Tax Central Circle - 5(2), Mumbai

In the result, both the appeals of the assessee for

ITA 4156/MUM/2025[2015-16]Status: DisposedITAT Mumbai12 Feb 2026AY 2015-16

Bench: Shri Amit Shukla& Shri Makarand Vasant Mahadeokar

Section 143(3)Section 144C(13)Section 144C(5)Section 254

scientific search process: - Databases used: Prowess and CapitalinePlus - Manufacturing sales > 75% - Positive net worth filter - Minimum sales threshold - AMP expenditure filter (< 3%) - R&D expenditure filter (< 3%) 57. The rationale for AMP and R&D filters has been clearly explained in the submissions, namely that a _ contract manufacturer, supplying goods ... 35th Percentile | 20.12% Median 21.78% 65th Percentile | 23.87% 74. It was pointed out that these companies, such as Dabur India Limited, incur substantial R&D expenditure and own brands. The learned AR submitted that the Non-AE segment economically resembles such entrepreneurial operations, as reflected by its high margins

Zensar Technologies Limited, Mumbai vs. DCIT Circle 2(3)(1), Mumbai

In the result, appeal is allowed

ITA 3439/MUM/2025[2020-21]Status: DisposedITAT Mumbai12 Feb 2026AY 2020-21

Bench: Shri Saktijit Dey & Shri Arun Khodpia

Section 10ASection 115JSection 142(1)Section 263Section 80GSection 80J

impugned order passed u/s. 263 of the Act qua the disallowance/ addition made in respect of deduction claimed on account of R&D expenditure. 4. Briefly the facts are, the assessee is a resident corporate entity engaged in the business of providing Software and Digital Services to its customers ... copy placed at Page 95 of the paper book) with an annexure wherein the Assessing Officer specifically referring to the R&D expenditure of Rs.5,56,51,192/- and called the assessee to furnish the breakup of the deduction along with documentary evidences to support the claim. Failing which, assessee

Rotofilt Engineers Limited, Ahmedabad vs. The ACIT, Circle-3(1)(1), Ahmedabad

In the result, the appeal filed by the assessee is allowed

ITA 1628/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad11 Feb 2026AY 2012-13

Bench: This Tribunal. Brief Facts Of The Case Are That The Assessee Is A Company

Section 143(3)Section 35

substance of the claim must be examined. In the instant case, the assessee has failed to furnish satisfactory documentation and justification for its R&D expenditure. 7.7 Therefore, from the above it is evident the primary requirement as per the Act that the R&D expenses must be incurred ... amounting to Rs.2,03,70,390/- u/s 35(2AB) of the Income-tax Act, 1961 (the Act), in respect of in-house R&D expenditure claimed by the appellant. I.T.A No. 1628/Ahd/2025 A.Y. 2012-13 Page No 6 Rotofilt Engineers Ltd. vs. ACIT 2. The Hon'ble CIT(A) erred

Acitltu-2, Chennai vs. Ashok Leyland Limited, Chennai

In the result, the appeal filed by the Revenue is partly allowed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 945/CHNY/2018[2009-10]Status: DisposedITAT Chennai05 Feb 2026AY 2009-10

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.895/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 Ashok Leyland Limited, Vs. The Deputy Commissioner Of 1, Sardar Patel Road, Guindy, Income Tax, Chennai 600 032. Company Circle – Ltu, Chennai. [Pan: Aaaca4651L] (अपीलाथ"/Appellant) (""थ"/Respondent) आयकर अपील सं./I.T.A. No.945/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 The Assistant Commissioner Of Vs. Ashok Leyland Limited, Income Tax, 1, Sardar Patel Road, Guindy, Large Taxpayer Unit – 2, Chennai. Chennai 600 032. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Assessee By : Shri Vikram Vijayaraghavan, Advocate (Virtual) ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Cit सुनवाई की तारीख/ Date Of Hearing : 10.11.2025 घोषणा की तारीख /Date Of Pronouncement : 05.02.2026 आदेश /O R D E R Per S.S. Viswanethra Ravi: Both The Cross Appeals Filed By The Assessee & The Revenue Are Directed Against The Order Dated 28.12.2017 Passed By The Ld.

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri AR V Sreenivasan, CIT

raised by the assessee in challenging the action of the ld. CIT(A) in confirming the disallowance of weighted deduction on R & D expenditure for want of Form 3CL. 37. Having heard both the parties, at the outset, we note that the Assessing Officer discussed the said issue in para ... relevant para 4 of the said decision is reproduced herein below: 4. Ground No.2 is regarding disallowance of claim of weighted deduction on R&D expenditure to the tune of Rs.23,13,53,553/-, since expenditure was not approved by DSIR. It is noted that similar ground has already been

Ashok Leyland Limited, Chennai vs. DCIT Company Circle 1 (1), Chennai

In the result, the appeal filed by the Revenue is partly allowed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 895/CHNY/2018[2009-10]Status: DisposedITAT Chennai05 Feb 2026AY 2009-10

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.895/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 Ashok Leyland Limited, Vs. The Deputy Commissioner Of 1, Sardar Patel Road, Guindy, Income Tax, Chennai 600 032. Company Circle – Ltu, Chennai. [Pan: Aaaca4651L] (अपीलाथ"/Appellant) (""थ"/Respondent) आयकर अपील सं./I.T.A. No.945/Chny/2018 िनधा"रण वष"/Assessment Year: 2009-10 The Assistant Commissioner Of Vs. Ashok Leyland Limited, Income Tax, 1, Sardar Patel Road, Guindy, Large Taxpayer Unit – 2, Chennai. Chennai 600 032. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Assessee By : Shri Vikram Vijayaraghavan, Advocate (Virtual) ""थ" की ओर से/Respondent By : Shri Ar V Sreenivasan, Cit सुनवाई की तारीख/ Date Of Hearing : 10.11.2025 घोषणा की तारीख /Date Of Pronouncement : 05.02.2026 आदेश /O R D E R Per S.S. Viswanethra Ravi: Both The Cross Appeals Filed By The Assessee & The Revenue Are Directed Against The Order Dated 28.12.2017 Passed By The Ld.

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri AR V Sreenivasan, CIT

raised by the assessee in challenging the action of the ld. CIT(A) in confirming the disallowance of weighted deduction on R & D expenditure for want of Form 3CL. 37. Having heard both the parties, at the outset, we note that the Assessing Officer discussed the said issue in para ... relevant para 4 of the said decision is reproduced herein below: 4. Ground No.2 is regarding disallowance of claim of weighted deduction on R&D expenditure to the tune of Rs.23,13,53,553/-, since expenditure was not approved by DSIR. It is noted that similar ground has already been

Ba Continuum India Private Limited, Hyderabad vs. DCIT., Circle-1(1), Hyderabad

ITA 368/HYD/2024[2005-06]Status: DisposedITAT Hyderabad04 Feb 2026AY 2005-06

Bench: SHRI RAVISH SOOD, HON'BLE (Judicial Member), SHRI MADHUSUDAN SAWDIA HON'BLE (Accountant Member)

Section 10ASection 142(1)Section 143(2)Section 147Section 40

providing for the below adjustments; a) Working capital adjustment b) Risk adjustment 5 BA Continuum India Private Limited vs. DCIT c) Marketing and R&D expenditure adjustment d) Depreciation adjustment 14. Without prejudice to argument in Ground 6, the expenses disallowed under 40(a) (i) of the Act should also

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

ITA 294/BANG/2025[2021-22]Status: DisposedITAT Bangalore30 Jan 2026AY 2021-22

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)
Section 250Section 254Section 37Section 90

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 293/BANG/2025[2020-21]Status: DisposedITAT Bangalore30 Jan 2026AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)
Section 250Section 254Section 37Section 90

which is to promote and encourage in-house research and development activities in India. A hyper-technical interpretation denying weighted deduction for genuine R&D expenditure would defeat the very purpose of the incentive provision. In view of the above submissions, the learned AR prayed that the weighted deduction under ... integral part of the statutory mechanism for granting weighted deduction. The purpose of involving DSIR is to ensure that only genuine and eligible R&D expenditure receives the benefit. Therefore, the Assessing Officer cannot ignore the quantification made by DSIR and independently allow deduction on the entire expenditure claimed

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 292/BANG/2025[2019-20]Status: DisposedITAT Bangalore30 Jan 2026AY 2019-20

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)
Section 250Section 254Section 37Section 90

which is to promote and encourage in-house research and development activities in India. A hyper-technical interpretation denying weighted deduction for genuine R&D expenditure would defeat the very purpose of the incentive provision. In view of the above submissions, the learned AR prayed that the weighted deduction under ... integral part of the statutory mechanism for granting weighted deduction. The purpose of involving DSIR is to ensure that only genuine and eligible R&D expenditure receives the benefit. Therefore, the Assessing Officer cannot ignore the quantification made by DSIR and independently allow deduction on the entire expenditure claimed

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

ITA 291/BANG/2025[2018-19]Status: DisposedITAT Bangalore30 Jan 2026AY 2018-19

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)
Section 250Section 254Section 37Section 90

which is to promote and encourage in-house research and development activities in India. A hyper-technical interpretation denying weighted deduction for genuine R&D expenditure would defeat the very purpose of the incentive provision. In view of the above submissions, the learned AR prayed that the weighted deduction under ... integral part of the statutory mechanism for granting weighted deduction. The purpose of involving DSIR is to ensure that only genuine and eligible R&D expenditure receives the benefit. Therefore, the Assessing Officer cannot ignore the quantification made by DSIR and independently allow deduction on the entire expenditure claimed

Edgeverve Systems Limited, Bangalore vs. ACIT, Circle-2(2)(1), Bangalore

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 290/BANG/2025[2017-18]Status: DisposedITAT Bangalore30 Jan 2026AY 2017-18

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Padamchand Kincha, CAFor Respondent: Shri Shivanad Kalakeri, CIT (DR)
Section 250Section 254Section 37Section 90

which is to promote and encourage in-house research and development activities in India. A hyper-technical interpretation denying weighted deduction for genuine R&D expenditure would defeat the very purpose of the incentive provision. In view of the above submissions, the learned AR prayed that the weighted deduction under ... integral part of the statutory mechanism for granting weighted deduction. The purpose of involving DSIR is to ensure that only genuine and eligible R&D expenditure receives the benefit. Therefore, the Assessing Officer cannot ignore the quantification made by DSIR and independently allow deduction on the entire expenditure claimed

Fiberhome India (P) Ltd, New Delhi vs. ACIT, Circle-7(1), New Delhi

Appeal of the assessee is partly allowed

ITA 6083/DEL/2024[2021-22]Status: DisposedITAT Delhi30 Jan 2026AY 2021-22

Bench: Ms. Madhumita Roy & Shri Manish Agarwalassessment Year: 2021-22

Section 14Section 143(3)Section 144BSection 144C(5)Section 92C

Without prejudice to anything contained in para 9.2 of the submission, it is further submitted that Avantel Ltd. has high value of R&D expenditure of Rs. 6,07,34,337/- during the FY 2020-21 out of total expenses of Rs. 60,06,57,225/-(Page

Zydus Lifesciences Ltd., Ahmedabad vs. The Dy.CIT, Central Circle-2(1), Ahmedabad

In the result, appeal filed by the assessee is partly allowed for statistical purposes

ITA 392/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad29 Jan 2026AY 2017-18

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), Ms. SUCHITRA KAMBLE (Judicial Member)

For Appellant: Shri Mukesh Patel, Shri Ajit KumarFor Respondent: Shri Prathvi Raj Meena, CIT.DR
Section 153(4)Section 153CSection 35Section 35(1)(i)Section 35(1)(iv)Section 92CSection 92C(2)

amended provision of section 35(2AB) of the Act. In terms of sections 35(2AB) of the Act, weighted deduction of R&D expenditure is allowed to eligible entities. The reading of the entire section reveals that this entitlement of weighted deduction is subject to approval by a designated authority ... rules in our view does not in principle defeat the policy objective of the section i.e. the grant of weighted deduction to R&D expenditure. In fact, the amendment to the Rules has made the section workable, granting the power to scrutinize the eligible expenditure to the authority which

Ge India Exports Private Limited, Bangalore vs. DCIT, Bangalore

In the result the appeal filed by the revenue is hereby dismissed

ITA 293/BANG/2016[2011-12]Status: DisposedITAT Bangalore27 Jan 2026AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Sachit Jolly, Sr. Advocate & Ms. ViyushtiFor Respondent: Dr. KJ Divya, CIT (DR)
Section 143(3)Section 144C(5)Section 254

learned DRP also excluded Infosys Technology Ltd. on the ground that it owns significant intangibles, has substantial brand value, incurs huge R&D expenditure and operates on a large scale which is entirely different from the assessee. We note that Infosys is a market leader with diversified operations, proprietary products

DCIT, Bangalore vs. M/S Ge India Export Pvt. Ltd., Bangalore

In the result the appeal filed by the revenue is hereby dismissed

ITA 253/BANG/2016[2011-12]Status: DisposedITAT Bangalore27 Jan 2026AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Sachit Jolly, Sr. Advocate & Ms. ViyushtiFor Respondent: Dr. KJ Divya, CIT (DR)
Section 143(3)Section 144C(5)Section 254

learned DRP also excluded Infosys Technology Ltd. on the ground that it owns significant intangibles, has substantial brand value, incurs huge R&D expenditure and operates on a large scale which is entirely different from the assessee. We note that Infosys is a market leader with diversified operations, proprietary products

Ntt Data Global Delivery Services Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-5(1)(1), Bangalore

In the result appeal of the assessee is partly allowed for statistical purposes

ITA 2062/BANG/2017[2013-14]Status: DisposedITAT Bangalore18 Dec 2025AY 2013-14

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Chavali Narayan, CAFor Respondent: Dr. Divya K.J – CIT

comparable. 13.6 The assessee further argued that the company incurs substantial Research & Development expenditure. The ld. DRP examined this and found that the R&D expenditure of Persistent Systems is less than 0.35% of its operating expenditure. Thus, the ld. DRP held that the assessee’s claim is exaggerated

Ntt Data Global Delivery Services Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax, Circle-5(1)(1), Bangalore

In the result appeal of the assessee is partly allowed for statistical purposes

ITA 1720/BANG/2017[2013-14]Status: DisposedITAT Bangalore18 Dec 2025AY 2013-14

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri Chavali Narayan, CAFor Respondent: Dr. Divya K.J – CIT

comparable. 13.6 The assessee further argued that the company incurs substantial Research & Development expenditure. The ld. DRP examined this and found that the R&D expenditure of Persistent Systems is less than 0.35% of its operating expenditure. Thus, the ld. DRP held that the assessee’s claim is exaggerated

Deputy Commissioner of Income Tax, Circle-1(1)(1), Bangalore vs. Amd India Private Limited, Bangalore

In the result, the appeal filed by the assessee is partly allowed and the appeal filed by the ld

ITA 2032/BANG/2024[2013-14]Status: DisposedITAT Bangalore11 Dec 2025AY 2013-14

Bench: Shri Prashant Maharishi & Shri Soundararajan K.

For Appellant: Shri Padam Chand Khincha, CAFor Respondent: Shri Shashi Saklani, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 28

such as product engineering services, platform solution ITA Nos. 1859 & 2032/Bang/2024 Page 14 of 15 and IT related business. It is also incurred R&D expenditure and it has substantial onsite operations. We find that the ld. TPO has rejected the same stating that the R&D activity in software ... development does not create any intangible. We do not find the same backed up with any empirical study. There is basic different between R&D expenditure incurred by the assessee to the core business of software development. Higher the R&D activity in software development, the higher capability of earning