DCIT, Circle- 8(1), New Delhi V. Elofic Industries Ltd., New Delhi

ITA 4291/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1019 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP VIMANI
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. AMIT SHUKLA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.4291/DEL/2018 ASSESSMENT YEAR: 2013-14 DCIT (E) CIRCLE 8 (1) NEW DELHI VS ELOFIC INDUSTRIES LTD. C-44, FRIENDS COLONY, NEW DELHI PAN NO.AAACE0425C (RESPONDENT) APPELLANT BY SH. MAHESH THAKUR, SR. DR RESPONDENT BY SH. SANDEEP VIMANI, CA DATE OF HEARING: 08/07/2021 DATE OF PRONOUNCEMENT: 08/07/2021 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-3, DELHI DATED 16.02.2018 PERTAINING TO A.Y. 2013-14. 2. THE ONLY GRIEVANCE OF THE REVENUE READ AS UNDER :- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION 2 OF RS.2,25,36,552/- MADE BY THE AO ON ACCOUNT OF EXPENDITURE INCURRED ON IN-HOUSE RESEARCH & DEVELOP MENT U/S. 35 (2AB). 2. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDING THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 35 (2AB) OF THE ACT AT RS.2,25,36,552/- ON WEIGHTED BASIS ON R & D EXPENSES. THE ASSESSEE WAS ASKED TO FURNISH FORM N O.3CL ISSUED BY DSIR FOR QUALIFYING FOR DEDUCTION U/S.35 (2AB) O F THE ACT. THE ASSESSEE FILED NECESSARY DOCUMENTS WITH A DETAILED SUBMISSION. THE SUBMISSIONS OF THE ASSESSEE WERE DISMISSED BY T HE AO WHO WAS OF FIRM BELIEF THAT THE ASSESSEE HAS FAILED TO FURNISH APPROVAL ISSUED BY DSIR AND ACCORDINGLY DENIED THE CLAIM OF DEDUCTION AND MADE ADDITION OF RS.22536552/-. ASSESSEE ASSAI LED THE ASSESSMENT BEFORE THE CIT(A) AND FURNISHED ALL THE NECESSARY DOCUMENTS. AFTER CONSIDERING THE FACTS AND THE SUBM ISSIONS THE CIT(A) HELD AS UNDER :- 2.1 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R, SUBMISSIONS OF THE APPELLANT HAD OBTAINED CERTIFICATE OF REGIST RATION DATED 20.04.2012 ISSUED BY DSIR VALID UPTO 31.03.2015, FO R THE PERIOD RELEVANT TO IMPUGNED ASSESSMENT YEAR ISSUED BY MINI STRY OF SCIENCE AND TECHNOLOGY, GOVERNMENT OF INDIA. THE CERTIFICAT E OF REGISTRATION WAS ISSUED BY THE DEPARTMENT OF SCIENTIFIC AND INDU STRIAL RESEARCH OF THE MINISTRY OF SCIENCE AND TECHNOLOGY AND APPEL LANT HAS COMPLIED WITH ALL THE STATUTORY REQUISITES FOR CLAI M OF WEIGHTED DEDUCTION U/S 35(2AB), AS PRESCRIBED U/S 35(2AB)(3) NAMELY 3 1) ENTERING INTO AN AGREEMENT WITH THE DEPARTMENT O F SCIENTIFIC 8S INDUSTRIAL RESEARCH IN FORM 3CK AS PRESCRIBED UNDER RULE 5(4). 2) MAINTENANCE OF SEPARATE BOOKS OF ACCOUNT IN RESP ECT OF IN-HOUSE RESEARCH 8& DEVELOPMENT FACILITY. 3) FILING OF AUDIT REPORT IN RESPECT OF BOTH CAPITA L NATURE AND REVENUE NATURE. THESE WERE ALSO MENTIONED IN SUBMISSIONS FI LED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. THE APPELLANT HAS ALSO RELIED ON THE DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF MARUTI SUZUKI INDIA LTD. VS. UNION O F INDIA AND OTHERS [2017] 397 ITR 728 (DELHI) WHICH HAS HELD THAT IN O RDER TO AVAIL OF THE BENEFIT U/S 35(2AB) WHAT IS RELEVANT IS NOT THE DATE OF RECOGNITION OR THE CUTOFF DATE MENTIONED IN THIS CE RTIFICATE OF THE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (D ISR) OR EVEN THE DATE OF APPROVAL BUT THE EXISTENCE OF THE RECOGNITI ON. ONCE APPROVAL IS GRANTED BY DISR, THE SAME WOULD APPLY TILL IT IS REMOVED. IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MARUTI SUZUKI INDIA LTD. (SUPRA) ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF RS. 2,25,36,552/- U/S 35 (2AB). HENCE, GROUNDS OF APPEAL 1, 2 AND 3 ARE ALLOWED. 3. BEFORE US THE DR VEHEMENTLY STATED THAT THERE IS A CONTRADICTION IN THE DATE OF REGISTRATION AS PER CE RTIFICATE AND FURTHER STATED THAT SINCE THIS CERTIFICATE WAS NEVE R SUBMITTED BEFORE THE AO, THEREFORE, THE AO HAD NO OPPORTUNITY TO EXAMINE THE SAME. THE DR REQUESTED FOR SETTING ASIDE THE IS SUE FOR VERIFICATION BY THE AO. THE COUNSEL FOR THE ASSESSE E FAIRLY CONCEDED TO THIS. 4. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. IN ONE OF ITS SUBMISSION TH E ASSESSEE 4 CLAIMED THAT THE APPROVAL IS GIVEN FOR 01.04.2016 T O 31.03.2018 AND IN ANOTHER SUBMISSION THE ASSESSEE CLAIMED THAT IT HAS OBTAINED THE CERTIFICATE OF REGISTRATION WHICH IS D ATED 20.04.2012 ISSUED BY DSIR FILED VALID UPTO 31.03.2015. NO DOU BT THERE ARE CONFLICTING DATES IN THE CERTIFICATE AND SINCE THE CERTIFICATE WAS NEVER EXAMINED BY THE AO WE DEEM IT FIT TO RESTORE THE ENTIRE ISSUE TO THE FILES OF THE AO. THE ASSESSEE IS DIRE CTED TO FURNISH THE CERTIFICATE BEFORE THE AO AND THE AO IS DIRECTE D TO EXAMINE THE SAME AND DECIDE THE ISSUE AFRESH AFTER GIVING A REA SONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSE. 6. DECISION ANNOUNCED IN THE OPEN COURT IN THE PRE SENCE OF BOTH THE REPRESENTATIVES ON 08.07.2021. SD/- SD/- (AMIT SHUKLA) (N. K. BILLAIYA) JUDICIAL MEMBER A CCOUNTANT MEMBER *NEHA* DATE:-08.07.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 5 DATE OF DICTATION 0 8 .07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 8 .07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 0 8 .07.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 0 8 .07.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 0 8 .07.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 0 8 .07.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 0 8 .07.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER