AARTI HEALTHCARE LTD, MUMBAI V. ACIT RG 10(1), MUMBAI

ITA 4402/MUM/2009

• Counselvise Citation: 440219914 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 22-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: DEEPESH T CHHEDA
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI G.E.VEERABHADRAPPA (PRESIDENT) AND SHRI B.R.MITTAL(JUDICIAL MEMBER) ITA NO.4402/MUM/2009 ASSESSMENT YEAR: 2005 -06 AARTI HEALTHCARE LIMITED, 2 ND FLOOR, UDYOG KSHETRA, MULUND, GOREGAON LINK ROAD, MUMBAI-80] PA NO.AAACA 3517 H ACIT, RANGE 10(1), MUMBAI, (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI DEEPESH T. CHHEDA RESPONDENT BY: SHRI C.G.K. NAIR DATE OF HEARING: 4.7.2012 DATE OF PRONOUNCEMENT: 18.7.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005-06 AGAINST ORDER DATED 19.5.2009 OF LD CIT(A), MUMBAI ON THE GROUND THAT LD CIT(A) HAS ERRED TO DISALLOW WEIGHTED DEDUCTION U/S.35(2AB) OF THE ACT IN RESPECT OF CAPITAL EXPENDITURE OF RS.4,06,34,734 INCURRED IN RESEARCH AND DEVELOPMENT ON THE GROUND THAT ASSESSEE DID NOT FURNISH APPROVAL FROM THE SECRETARY, DSIR IN FO RM 3CM. 2. AT THE TIME OF HEARING, LD A.R. SUBMITTED THAT A SSESSEE FILED THE REQUISITE APPLICATION FOR RECOGNITION OF IN-HOUSE R&D UNITS T O DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR) AND REFERRED PAGES 1 TO 18 OF PB. HE SUBMITTED THAT ASSESSEE RECEIVED RECOGNITION VIDE LETTER DATED 24. 5.2005 WHICH IS VALID UPTO 31.3.2007 AND REFERRED PAGE 19 OF PB. HE SUBMITTED THAT DSIR ALSO VIDE LETTER DATED 19.11.2007 DECIDED TO ACCORD RENEWAL OF RECOGNITION UPTO 31.3. 2009 AND REFERRED PAGE 20 OF PB. HE SUBMITTED THAT ASSESSEE IS FOLLOWING UP THE MATT ER WITH DSIR FOR OBTAINING APPROVAL IN FORM 3CM WHICH IS YET TO BE RECEIVED. TO SUBSTA NTIATE HIS SUBMISSION, HE REFERRED ITA NO.4402/MUM/2009 ASSESSMENT YEAR: 2005 -06 2 PAGES 25-26 OF PB, WHICH ARE COPIES OF LETTERS DATE D 28.2.2007 AND 15.10.2007. LD A.R. SUBMITTED THAT ASSESSEE IN RESPECT OF ITS SISTER CO NCERN M/S. AARTI INDUSTRIES LTD., RECEIVED APPROVAL UNDER SECTION 35(2AB) FOR THE PER IOD 6.7.2001 TO 31.3.2012 FROM DSIR VIDE CERTIFICATE DATED 5.8.2011 IN FORM 3CM AN D REFERRED PAGE 27 OF PB. LD A.R. SUBMITTED THAT THE MATTER MAY BE RESTORED TO AO AS THE ASSESSEE IS EXPECTING TO GET THE APPROVAL AT ANY TIME FROM DSIR IN THE PRESCRIBED FO RM AND THE AO BE DIRECTED TO GRANT DEDUCTION TO THE ASSESSEE U/S.35(2AB) OF THE ACT ON THE BASIS OF THAT CERTIFICATE. LD D.R. SUBMITTED THAT HE HAS NO OBJECTION IF THE MATT ER IS RESTORED TO AO TO DECIDE THE CLAIM OF THE ASSESSEE AS PER LAW. 3. CONSIDERING THE ABOVE SUBMISSIONS OF LD REPRESEN TATIVES AND THE FACT THAT ASSESSEE IS FOLLOWING UP THE MATTER WITH DSIR FOR I TS APPROVAL FOR INHOUSE R&D FACILITY FOR INCURRING ALL THE EXPENDITURES, WE CONSIDER IT PRUDENT, IN THE INTEREST OF JUSTICE, TO RESTORE THE MATTER TO AO WITH A DIRECTION THAT IF T HE ASSESSEE GETS THE APPROVAL FROM DSIR, THE CLAIM OF THE ASSESSEE BE ALLOWED AS PER P ROVISIONS OF THE ACT. HENCE, GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE ALLOWED. 4. IN THE RESULT, APPEAL FIELD BY THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 18 TH JULY , 2012 SD/- (G.E.VEERABHADRAPPA) PRESIDENT SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 18 TH JULY , 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),X, MUMBAI 4. COMMISSIONER OF INCOME TAX, MC-X , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI