RAS Life Sciences Private Limited, Siddipet V. ITO Ward-3(1), Hyderabad

ITA 386/Hyd/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9578 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-10-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 22-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHENNUBOTLU
• Keywords: Transfer pricing
• Section: 37

Judgement Text

ITA 386 of 2022 RAS LIFE SCIENCES P Ltd Page 1 of 3 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.386/Hyd/2022 Assessment Year:2018-19 RAS Life Sciences (P) Ltd Siddipet PAN:AADCR9864P Vs. Income Tax Officer Ward 3(1) Hyderabad (Appellant) (Respondent) Assessee by : Shri Chennubotlu, CA Revenue by: Shri Rajendra Kumar,CIT(DR) Date of hearing: 27/10/2022 Date of pronouncement: 28/10/2022 ORDER Per Laliet Kumar, J.M This appeal filed by the assessee is directed against the order dated 30.07.2022 of the Revenue relating to A.Y.2018- 19. 2. Facts of the case in brief, are that during the course of scrutiny proceedings, the assessee claimed deduction u/s 35(2AB) of Rs.1,64,15,730/-. However, as per 3CL of the assessee for A.Y 2018-19, as approved by DSIR, assessee has incurred R&D expenditure of Rs.99.92 lakhs. Assessee is hence eligible for 150% weighted deduction of R&D expenditure of Rs.99,92,000/- approved by DSIR. 150% of Rs.99,92,000/- is Rs.1,49,88,000/- while assessee has claimed deduction u/s 35(2AB) of ITA 386 of 2022 RAS LIFE SCIENCES P Ltd Page 2 of 3 Rs.1,64,15,730/-. Hence, the difference of Rs.14,27,729 was disallowed u/s 35(2AB) and added back to the income of the assessee. The learned Assessing Officer by incorporating the order of the TPO dated 31.07.2021 passed the draft assessment order. Against the draft assessment order dated 25.09.2021, the assessee filed objection before the DRP Bengaluru which in turn, issued directions under 144C(5)2022-23/1043476056(1) and the DCIT (TPO)-3 Hyderabad passed an order revising the transfer pricing adjustment and no transfer pricing adjustment was made to the income as per the latest order. Further, the DRP directed the Assessing Officer to verify the nature of expenses of Rs.9,52,131/- disallowed by DSIR and allow the revenue expenses incurred on R&D u/s 37 of IT Act. Since no details were provided by the assessee and nothing was available on record, the Assessing Officer added Rs.9,52,131/- to the returned income of the assessee. 3. The DRP vide order dated 16.06.2022, has agreed the contention of the assessee that the R&D revenue expenses are incurred for the business of the assessee and hence eligible for deduction u/s 37, however, directed the Assessing Officer to verify the expenses. 4. We heard the rival contentions and perused the material available on record. Since the DRP has agreed that the assessee is eligible for deduction u/s 37 for the revenue expenses incurred by the assessee for its business, however, the Assessing Officer disallowed the expenses without verifying the details of expenses, albeit without granting opportunity to the assessee. In view of the above, we direct the Assessing Officer to verify the expenses as directed by the DRP, hence, the case is remanded ITA 386 of 2022 RAS LIFE SCIENCES P Ltd Page 3 of 3 back to the file of the Assessing Officer with the direction to comply the directions of the DRP, after affording opportunity of being heard to the assessee in accordance with law. 5. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 28 th October, 2022. Sd/- Sd/- (R.K. PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 28 th October, 2022. Vinodan/sps Copy to: S.No Addresses 1 RAS Life Sciences (P) Ltd, Plot No.17, Survey No.321, Biotech Park, Phase III TSHC, Markook, Siddipet, Karkapatla 502281 2 Income Tax Officer Ward 3(1) 727 Signature Towers, Sy. No.6(P) of Kondapur, Sy.No.37 (P) of Kothaguda, Opp. Botanical Gardens, Serilingampally(M) Hyderabad 3 DRP-I, Kendriya Sadan, 4 th Floor, C Wing, Bengaluru 560034 4 Pr. CIT-1, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order