Camphor & Allied Products Limited, Vadodara V. The Addl. CIT, Range-1, Baroda

ITA 2126/AHD/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3638 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-09-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 17-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJDIP SINGH
• Assessee Lawyers: K P SINGH

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ITA NO. 2126/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) M/S.CAMPHOR & ALLIED PRODUCTS LTD. PLOT NO.3, GIDC INDUSTRIAL ESTATE NANDESAI VADODARA 391 340 / VS. THE ADDL.CIT RANGE-1 BARODA ./ ./ PAN/GIR NO. : AAACC 9211 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI K.P. SINGH, AR / RESPONDENT BY : SHRI RAJDIP SINGH, SR.DR / DATE OF HEARING 30/09/2019 !'# / DATE OF PRONOUNCEMENT 13 /11/2019 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)1,VADODARA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB- 1/132/2014-15 DATED 19/05/2015 ARISING IN THE A SSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS 'THE ACT') DATED 13/03/2014 RELEVANT TO ASSE SSMENT YEAR (AY) 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.2126/AHD/2015 M/S.CAMPHOR & ALLIED PRODUCTS LTD. VS. ADD.CIT ASS T.YEAR 2011-12 - 2 - 1. THE LD. CIT(A) ERRED IN DENYING THE CLAIM OF WEIGHT ED DEDUCTION U/S.35(2AB) @ 200% OF RS.42,11,147/- WITH OUT APPRECIATING THE DETAILED SUBMISSION OF THE APPELLA NT COMPANY AND NOT FOLLOWING THE JUDGEMENT OF HONBLE HIGH COU RT OF GUJARAT IN THE CASE OF COMMISSIONER OF INCOME TAX V S. CLARIS LIFESCIENCE LTD. 174 TAXMAN 113(GUJ.). 2. IT IS SUBMITTED THAT THE DEPARTMENT OF SCIENCE & I NDUSTRIAL RESEARCH, MINISTRY OF SCIENCE AND TECHNOLOGY HAS RE NEWED RECOGNITION OF IN-HOUSE R&D UNIT UPTO 31/03/2012 AN D THE SAME WAS FILED WITH THE CIT. ON THE FACT, THE CIT OUGHT TO HAVE ALLOWED THE CLAIM OF WEIGHTED DEDUCTION U/S.35(2AB) AS CLAIMED BY THE APPELLANT. 2. GROUND NOS.1 & 2 ARE INTER-CONNECTED. BRIEFLY STATED, FACTS ARE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINES S OF MANUFACTURING OF FINE CHEMICALS. THE APPELLANT HAD CLAIMED WEIGHTED DEDUCTION U/S.35(2AB) OF THE ACT AT 200% OF RS.42,11,147/- WH ICH WAS DISALLOWED BY THE ASSESSING OFFICER STATING THAT ASSESSEE HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNTS. ON THE OTHER HAND, AS SESSEES CONTENTION WAS THAT ANY EXPENDITURE INCURRED BY THE ASSESSEE O N SCIENTIFIC RESEARCH ON THE IN-HOUSE R&D FACILITY APPROVED BY THE PRES CRIBED AUTHORITIES HAS TO BE ALLOWED BY DEDUCTION OF EXPENDITURE SO IN CURRED FOR DEVELOPMENT OF IN-HOUSE FACILITY IS TO BE HELD AS ELIGIBLE FOR WEIGHTED DEDUCTION. THE ASSESSEE HAS FILED RENEWAL OF RECOG NITION OF IN-HOUSE R&D VALID UPTO 31/03/2012 AND SUBMITTED THAT ASSES SEE HAD ALREADY FILED REQUIRED DETAILS TO THE DEPARTMENT OF SCIENTI FIC & INDUSTRIAL RESEARCH MINISTRY OF SCIENCE AND TECHNOLOGY AND A COPY OF FORM ITA NO.2126/AHD/2015 M/S.CAMPHOR & ALLIED PRODUCTS LTD. VS. ADD.CIT ASS T.YEAR 2011-12 - 3 - NO.3CM WHICH WAS APPROVED BY THE GOVERNMENT DEPARTM ENT FOR R&D FACILITIES. BUT THE ASSESSING OFFICER WAS NOT AGRE ED WITH THE CONTENTION AND DISALLOWED A SUM OF RS.42,11,147/-. 3. AGAINST THE SAID ORDER OF ASSESSING OFFICER, ASS ESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD.CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. NOW AGGRIEVED ASSESSEE HAS FILED SECOND STATUTOR Y APPEAL BEFORE US. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER AND HEARD BOTH THE PARTIES. IN SIMILAR FACTS AND CIRCU MSTANCES OF THE CASE, IN ITA NO.819/AHD/2015 FOR AY 2010-11 (IN ASSESSEE S OWN CASE) DATED 28/06/2018, THE CO-ORDINATE BENCH HAS GRANTED RELI EF TO THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: 13. SO FAR DENYING THE CLAIM OF WEIGHTED DEDUCTIO N U/S.35(2AB) @ 150% OF RS.2209 LAKHS IS CONCERNED, APPELLANT HAS PRODUCED A CERTIFICATE OF RENEWAL OF RECOGNITION OF IN-HOUSE R&D UNIT DATED 11/08/2009. THE CERTIFICATE WAS ISSUED BY TH E DEPARTMENT OF SCIENTIFIC & INDUSTRIAL RESEARCH, MINISTRY OF SCIEN CE & TECHNOLOGY, GOVERNMENT OF INDIA AND CERTIFICATE BEA RS FOLLOWING LINES: ITA NO.2126/AHD/2015 M/S.CAMPHOR & ALLIED PRODUCTS LTD. VS. ADD.CIT ASS T.YEAR 2011-12 - 4 - THIS IS TO INFORM YOU THAT IT HAS BEEN DECIDED TO ACCORD RENEWAL OF RECOGNITION TO THE IN-HOUSE R&D UNIT(S) OF YOUR FIR M AT 3 INDUSTRIAL AREA, NANDESARI, DIST. BARODA UP TO 31.03.2012. THE ABOVE WORDINGS OF THE CERTIFICATE THEMSELVES SH OW THAT AN APPROVAL HAS BEEN GRANTED FOR CLAIMING WEIGHTED DED UCTION U/S.35(2AB) OF THE ACT FOR EXPENDITURE INCURRED FOR RESEARCH AND DEVELOPMENT ACTIVITY. HOWEVER, THE LD. AS WELL AS CIT(A) DID NOT HAVE CONSIDERED THE ABOVE AUTHENTICATED CERTIFICATE , ISSUED BY DSIR, GOVT.OF INDIA. IN FACT, BEFORE GRANTING RECO GNITION, THE DSIR SATISFY THE BUDGET, THEN ONLY THEY GRANT THE R ECOGNITION OR RENEW THE RECOGNITION TO INCUR EXPENDITURE TOWARDS R&D. 14. IN THE CASE OF CIT VS. CLARIS LIFESCIENCES LTD . 174 TAXMANN 113 (GUJ.) (2008). IT HAS BEEN CONTENDED THAT WHET HER SECTION 35(2AB) NOWHERE SUGGESTS THAT DATE OF APPROVAL OF R ESEARCH AND DEVELOPMENT FACILITY WILL BE CUT-OFF DATE FOR ELIGI BILITY OF WEIGHTED DEDUCTION UNDER THIS SECTION ON EXPENSES INCURRED F ROM THAT DATE ONWARDS, ONCE FACILITY IS APPROVED, ENTIRE EXPENDIT URE SO INCURRED ON DEVELOPMENT OF RESEARCH AND DEVELOPMENT FACILITY HAS TO BE ALLOWED FOR WEIGHTED DEDUCTION. 15. RESPECTFULLY FOLLOWING THE AFORESAID JURISDICT IONAL HIGH COURT JUDGEMENT, WE ALLOW THIS GROUND OF APPEAL OF THE AP PELLANT. 6. SINCE RELIEF WAS ALREADY GRANTED BY THIS CO-ORDI NATE BENCH FOLLOWING THE HONBLE JURISDICTIONAL HIGH COURT JUD GEMENT, WE FIND MERIT IN THE CASE OF THE ASSESSEE AND ALLOW THE GRO UND OF APPEAL OF THE ASSESSEE. THUS, IN PARITY WITH THE AFORESAID ORDER OF THE CO-ORDINATE BENCH, WE ALLOW THE APPEAL OF THE ASSESSEE. ITA NO.2126/AHD/2015 M/S.CAMPHOR & ALLIED PRODUCTS LTD. VS. ADD.CIT ASS T.YEAR 2011-12 - 5 - 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 13/11/2019 SD/- SD/- ( MANISH BORAD ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICI AL MEMBER AHMEDABAD; DATED 13/11/2019 &.., .(.. / T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-1, VADODARA 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 30.10.2019( DICTATION-PAD 5- PAGES ATTACHED AT THE END OF THIS FILE ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31.10.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.13.11.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.11.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER