Veeda Clinical Research Pvt.Ltd., Ahmedabad V. The ACIT.,Circle-8, Ahmedabad

ITA 474/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0156 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

ITA NO.474/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM ] ITA NO . 474/AHD/2012 AS SESSMENT Y EAR : 2008 - 09 VEEDA CLINICAL RESEARCH PVT . LTD . .APPELLANT SHIVALIK PLAZA - A, NEAR IIM AMABAWADI, AHMEDABAD. [PAN: AACC C 3633Q] VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 8, AHMEDABAD ...... . RESPONDENT APPEARANCES BY: TUSHAR P HEMANI , FOR THE A PPELLANT SATISH SOLANKI , F OR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 04.0 8.2016 DATE OF PRONOUNCING THE ORDER : 28 .10 .2016 O R D E R 1. BY WAY OF TH IS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 26.1 2 .2011 PASSED BY THE LEARNED CIT (A) , IN THE MATTER OF ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961, FOR ASSESSMENT YEAR 200 8 - 09. 2. GRIEVANCE OF THE ASSESSEE, AS PRESSED BEFORE US, IS THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS OFF THE CASE IN CONFIRMING THE ACTION OF THE LEARNED AO IN DISALLOWING DEDUCTION O F RS 23,80,000 CLAIMED UNDER SECTION 35D OF THE ACT . ALL ITA NO.474/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 2 OF 3 OTHER ISSUES RAISED IN THE APPEAL WERE NOT PRESSED ON ACCOUNT OF, WHAT LEARNED COUNSEL STATES AS, SMALLNESS OF AMOUNT INVOLVED . 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED A DEDUCTION OF RS 23,80,000, UNDER SECTION 35D OF THE ACT, IN RESPECT OF 1/5 TH OF AMORTIZED EXPENDITURE OF RS 1,19,00,000 INCURRED IN THE PRECEDING YEAR FOR RAISING OF CAPITAL. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE, DOING CONTRACT RESEARCH WORK IN THE AREA OF BIO TECHNOLOGY AND BIO EQUIVALENCE, IS NOT AN INDUSTRIAL UNDERTAKING. THE DEDUCTION WAS DECLINED. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT IN VAIN. NOT S ATISFIED BY THE CIT(A) S ORDER, THE ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. IT IS CONTENDED BY THE LEARNED COUNSEL THAT THE WORK DONE BY THE ASSESSEE INVOLVES COLLECTING DATA, PROCESSING IT AND MAKING IT RELEVANT FOR THE END USER . IT ALSO INVOLVES COLLECTION OF SAMPLES, PUTTING THEM TO SCIENTIFIC TESTS AND OBTAINING RESULTS. IF THAT BE SO,I IN THE L IGHT OF DECISIONS OF HON BLE JURISDICTIONAL HIGH COURT, IN THE CASES OF CIT VS PROFESSIONAL INFORMATION SYSTEMS & MANAGEMENT [(2005) 274 ITR 242 (GUJ)] AND CIT VS SURESH AMIN FAMILY TRUST [(2007) 288 ITR 101 (GUJ)], AN UNDERTAKING INVOLVED IN THESE ACTIVIT IES IS REQUIRED TO BE TREATED AS INDUSTRIAL UNDERTAKI NG . HOWEVER, AS FACTUAL ELEMENTS EMBEDDED IN THE CONTENTIONS OF THE LEARNED COUNSEL ARE TO BE VERIFIED, THE MATTER, FOR THE SAID LIMITED PURPOSES, IS REQUIRED TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THAT ASPECT. AS REGARDS THE ALTERNATIVE PLEA OF THE ASSESSEE, I.E. GIVING RETROSPECTIVE ITA NO.474/AHD/2012 ASSESSMENT YEAR: 2008 - 09 PAGE 3 OF 3 EFFECT TO THE AMENDMENT BY THE FINANCE ACT 2008, GIVEN THE ABOVE FINDINGS, THAT ASPECT OF THE MATTER IS ACADEMIC AS ON NOW. A CALL ON THE SAME WILL HAVE TO BE TAKEN, ONLY IN THE EVENT OF THE BASIC PLEA NOT FINDING FAVOUR OF BY THE ASSESSING OFFICER. 6. GRIEVANCE OF THE ASSESSEE, AGAINST DECLINING DEDUCTION UNDER SECTION 35D, IS THUS UPHELD IN PRINCIPLE . 7. IN THE RESULT, THE APPEAL IS PART LY ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 28 TH DAY OF OCTOBER, 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 28 TH DAY OF OCTOBER , 2016 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD