ACIT-7(1)(1), MUMBAI, MUMBAI, MAHARASHTRA V. GREAVES COTTON LIMITED, MUMBAI

ITA 6548/MUM/2024

AI Insights

The case involves the Income Tax Department (Appellant) contesting the decision of the CIT(A) which allowed Greaves Cotton Limited (Respondent) a deduction under section 35(2AB) of the Income Tax Act for the assessment year 2011-12. The primary contention of the revenue was whether the CIT(A) was justified in allowing a deduction that exceeded the expenditure certified by the Department of Scientific & Industrial Research (DSIR) in Form 3CL. The tribunal referenced several previous cases where similar issues were adjudicated, noting that the assessee had incurred expenditure on research and development, and the DSIR had certified these expenditures. The tribunal dismissed the appeal, aligning with the findings of the Co-ordinate Bench that had ruled in favor of the assessee in similar circumstances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472735 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Other Referred Cases: ACIT V Crompton Greaves Ltd. [2019] 111 taxmann.com 338 (Mumbai - Trib.)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHOR DHULE; DR
• Assessee Lawyers: AMOL PATANKAR; AR
• Section: 148; 143(1)

Judgement Text

" | आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 6548/Mum/2024 Assessment Year: 2011-12 ACIT – 7(1)(1), Mumbai Vs Greaves Cotton Limited Unit No. 701, 7th Floor Tower 3, Equinox Business Park LBS Marg Maharashtra - 400070 [PAN: AAACG2062M] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Amol Patankar, A/R Revenue by : Shri Dr. Kishor Dhule, CIT D/R सुनवाई की तारीख/Date of Hearing : 11/02/2025 घोषणा की तारीख /Date of Pronouncement: 13/02/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the revenue is preferred against the order dated 15/10/2024 by NFAC, Delhi pertaining to AY 2011-12. 2. The grievance of the revenue read as under:- “I. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing deduction u/s 35(2AB) of the Act claimed over and above the expenditure as certified by the Department of Scientific & Industrial Research (\"DSIR\") in Form 3CL to be incurred on scientific research related to the business of assessee ignoring the fact that DSIR is the only authority to examine and certify whether the expenditure claimed are incurred on scientific research or not?\" II. \"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing deduction u/s 35(2AB) of the Act claimed over and above as certified by DSIR in Form 3CL without verifying the fact whether such expenditure has incurred only on scientific research by fulfilling the conditions as laid down in provisions of section 35(2AB) of the Act or not and without remanding the matter back to the file of AO for examination of correctness of claim made as per provision of section 35(2AB) of the Act?” I.T.A. No. 6548/Mum/2024 Assessment Year: 2011-12 2 3. Briefly stated the facts of the case are that the assessee has filed its return of income on 30/11/2012 declaring total income at Rs. 1,97,12,04,132/-. The return was processed u/s 143(1) of the Act and subsequently, selected for scrutiny assessment and accordingly statutory notices were serve upon the assessee. The assessment was framed u/s 143(1) r.w.s. 144C(13) of the Act vide order dated 25/01/2016 determining total income at Rs. 2,05,36,40,240/-. The assessment was reopened by notice u/s 148 of the Act dated 31/03/2018 as the AO had reasons to believe that income had escaped assessment on account of deduction u/s 35(2AB) of the Act. 4. The quarrel revolves around the disallowance of deduction u/s 35(2AB) of the Act amounting to Rs. 15,61,01,680/-. This issue was considered by the Co-ordinate Bench in ITA No. 1745/Mum/2016, ITA No. 2069/Mum/2017, ITA No. 7166/Mum/2017 and ITA No. 6560/Mum/2018. The relevant findings of the Co-ordinate Bench reads as under:- “029. We have carefully considered the rival contention and perused the orders of the lower authorities. There is no denial that assessee is recognized research and development unit. It is not in dispute that assessee has incurred expenditure for research and development. The assessee has submitted the respective details before the DSIR. On the basis of the assessment, it has reduced the amount of expenditure incurred by the assessee. The coordinate bench ACIT V Crompton Greaves Ltd. [2019] 111 taxmann.com 338 (Mumbai - Trib.)has held that Mandate of approval of quantum of expenditure had been put in place only with effect from 1-7-2016, hence, non-approval of quantum of expenditure for assessment year 2009-10 did not entitle Assessing Officer to make disallowance under section 35(2AB). The assessment year involved before us is assessment year 2011 – 12. Therefore respectfully following the decision of the coordinate bench, we direct the learned assessing officer to delete the disallowance of deduction under section 35 (2AB) of the act of ₹ 23,096,418/–. Ground number D of the appeal is allowed.” I.T.A. No. 6548/Mum/2024 Assessment Year: 2011-12 3 5. Respectfully following the decision of the Co-ordinate Bench (supra), we do not find any reason to interfere with the findings of the ld. CIT(A). 6. In the result, appeal of the revenue is dismissed. Order pronounced in the Court on 13th February, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 13/02/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014\u001cथ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "