AGAPPE DIAGNOSTICS LTD., MUMBAI V. DCIT CIR. - 9(1)(1), MUMBAI

ITA 5284/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7398 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 25-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: V SATYANARAYANAN
• Keywords: Corroborative evidences
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 5284/MUM/2016 ( / ASSESSMENT YEAR: 2012 - 13 ) AGAPPE DIAGNOS TICS LTD. 401 - 402, JAISINGH BUSINESS CENTRE, SAHARA ROAD, MUMBAI - 400 099 / VS. DY. CIT, CIRCLE - 9(1)(1), MUMBAI ./ ./ PAN/GIR NO. AACCA 3940 Q ( / APPELLANT ) : ( / RESPONDENT ) / APP ELLANT BY : SHRI V. SATYANARAYANAN / RESPONDENT BY : MS. POOJA SWAROOP / DATE OF HEARING : 22.02.2018 / DATE OF PRONOUNCEMENT : 18.05 .2018 / O R D E R PER SA KTIJIT DEY , J . M.: THIS AS AN APP EAL BY THE ASSESSEE AGAINST ORDER DATED 16.06.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS ) 16, MUMBAI, FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE ONLY EFFECTIVE GROUNDS RAISED BY THE ASSESSEE READS AS UNDER: 2 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. 1. THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 35(2AB) OF THE INCOME TAX ACT AMOUNTING TO RS.65,16,350/ - . SINCE THE CERTIFICATE OF REGISTRATION WAS ISSUED BY DSIR ON 2.6.2011 WHICH IS VALID TILL 31.3.2014 AND THE APPEL LANT HAD FILED APPLICATION FOR ISSUING FORMS 3CM AND 3 CL ON 27.03.2012 THE DEDUCTION CLAIMED UNDER SECTION 35(2AB) OUGHT TO HAVE BEEN GRANTED. 3. BRIEFLY THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE A COMPANY IS ENGAGED IN THE BUSINE SS OF MANUFACTURING DIAGNOSTIC REAGENTS, AND EQUIPMENTS, TRADING AND MAINTENANCE OF EQUIPMENTS. FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE FILED ITS RETURN OF INCOME ON 21.09.2012 DECLARING TOTAL INCOME OF RS.2,47,91,383/ - . WHILE COMPUTING THE INCOME, THE ASSESSEE CLAIMED DEDUCTION OF RS.1,30,32,700/ - @ 200% U/S.35(2AB) OF THE INCOME TAX ACT, 1961. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS WITH SUPPORTING EVIDENCES, INCLUDING THE LETTE R OF APPROVAL OF THE PRESCRIBED AUTHORITY FOR JUSTIFYING THE CLAIM OF DEDUCTION U/S.35(2AB) OF THE ACT. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE VIDE LETTER DATED 16.12.2014 SUBMITTED THE DETAILS OF RESEARCH AND DEVELOPMENT (R & D) EXPENSES ALONG WITH THE SUPPORTING EVIDENCES AND ALSO WITH AN EXPLANATORY NOTE JUSTIFYING ITS CLAIM OF DEDUCTION U/S. 35(2AB) OF THE ACT. THE ASSESSEE ALSO RELIED UPON CERTAIN DECISIONS/CASE LAWS IN SUPPORT OF ITS CLAIM OF DEDUCTION. THE ASSESSING OF FICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFYING THE DETAILS FURNISHED, OBSERVED THAT THE REGISTRATION CERTIFICATE ISSUED BY THE PRESCRIBED AUTHORITY , DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR), FOR THE R & D FACILITY OF T HE 3 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. ASSESSEE ON 02.06.2011 WAS SPECIFICALLY FOR THE PURPOSE OF AVAILING CUSTOMS/CENTRAL EXERCISE DUTY EXEMPTION. FURTHER, REFERRING TO PARAGRAPH 9 OF THE SAID REGISTRATION CERTIFICATE, THE ASSESSING OFFICER OBSERVED THAT THE REGISTRATION CERTIFICATE DOES NO T IN ANY WAY AMOUNT TO APPROV AL UNDER THE INCOME TAX ACT, 1961. REFERRING TO THE PROVISION OF SECTION 35(2AB), THE ASSESSING OFFICER OBSERVED , THE REQUISITE CERTIFICATE ENABLING THE ASSESSEE TO CLAIM DEDUCTION U/S. 35(2AB) SHOULD BE IN FORM 3CM AND THE QUA NTUM OF APPROV ED EXPENDITURE ON R & D HAS TO BE IN FORM 3C L . THE ASSESSING OFFICER OBSERVED THAT FORM 3CL WAS ISSUED BY DSIR ON 12.11.2014, WHEREIN THE APPROVAL WAS GRANTED FOR ASSESSMENT YEAR 2013 - 14 AND NOT FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER OBSERVED , HAD IT BEEN THE INTENTION OF THE LEGISLATURE TO ALLOW EVERY CLAIM OF R & D EXPENDITURE, NEED OF INSERTING SUB SECTION (4) TO SECTION 35 WOULD NOT HAVE ARISEN. HE OBSERVED THAT SUB SECTION (4) TO SECTION 35 WAS INSERTED SPECIFICALLY TO AL LOW GENUINE EXPENDITURE, AS IT REQUIRES THE PRESCRIBED AUTHORITY TO APPROVE R & D FACILITY IN THE PRESCRIBED MANNER. THE ASSESSING OFFICER OBSERVED , UNLESS THE APPROVAL IS GRANTED BY THE PRESCRIBED AUTHORITY, I.E., DSIR, THE ASSESSEES CLAIM OF DEDUCTION U /S. 35(2AB) CANNOT BE ALLOWED. IN SUPPORT OF SUCH CONCLUSION, THE ASSESSING OFFICER RELIED UPON A C OUPLE OF DECISIONS OF THE ITAT. THUS, ON THE AFORESAID BASIS, THE ASSESSING OFFICER ULTIMATELY CONCLUDED THAT SINCE THE APPROVAL GRANTED BY THE DSIR IS APPLI CABLE FROM ASSESSMENT YEAR 2013 - 14, ASSESSEES CLAIM OF DEDUCTION U/S. 35(2AB) FOR THE IMPUGNED ASSESSMENT YEAR IS NOT ALLOWABLE. ACCORDINGLY, DISALLOWING ASSESSEES CLAIM, HE RESTRICTED THE DEDUCTION 4 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. TO 100% OF THE EXPENDITURE INCURRED , WHICH WORK ED OUT TO RS.65,16,350/ - . AS A RESULT, THE BALANCE AMOUNT OF RS.65,16,350/ - WAS DISALLOWED. 4. BEING AGGRIEVED OF SUCH DISALLOWANCE, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 5. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THOUGH , THE ASSESSEE MADE ELABORATE SUBMISSIONS REITERATING THE STAND TAKEN BEFORE THE ASSESSING OFFICER, HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE APPROVAL/REG ISTRATION GRANTED FOR THE PURPOSE OF CENTRAL EXERCISE AND CUSTOMS WAS FOR PURCHASING PLANT AND MACHINERY WHICH ARE PREREQUISITE FOR ESTABLISHING THE BUSINESS, WHEREAS , THE INCOME IS TAXED UNDER THE IN COME T AX A CT ONLY AFTER THE BUSINESS OPERATION OF A CONC ER N COMMENCES AND INCOME IS EARNED. HE, THEREFORE, HELD THAT THE REGISTRATION GRANTED BY THE DSIR FOR THE PURPOSE OF CENTRAL EXERCISE AND CUSTOM IS NOT SUFFICIENT FOR CLAIMING DEDUCTION U/S. 35(2AB). 6. FINALLY, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) REFERRING TO THE DECISIONS OF THE TRIBUN AL IN THE CASE OF FERMENT BIOTECH LTD., RELIED UPON BY THE ASSESSING OFFICER HELD THAT THE FACTS OF THE SAID CASE BEING IDENTICAL TO THE ASSESSEES CASE, THE R ATIO LAID DOWN THEREIN WOULD APPLY TO ASSESSEES CASE AND ACCORDINGLY SUSTAIN ED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. 7. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE R & D FACILITY OF THE ASSESSEE WAS GRANTED REGISTRATION BY DSIR ON 02.06.2011. H E SUBMITTED , THOUGH , IN THE REGISTRATION CERT IFICATE IT HAS BEEN MENTIONED THAT THE R & D FACILITY WAS REGISTERED FOR THE PURPOSE OF AVAILING CUSTOM DUTIES EXEMPTION , BUT THAT DOES NOT DETRACT FROM THE FACT THAT THE ASSESSEE HAS SET UP ITS R & D FACILITIES AND INCURRED EXPENDITURE NOT ONLY FOR SETTIN G UP THE R & D FACILITIES BUT UNDERTAKING R & D ACTIVITIES. HE SUBMITTED , IN TERMS WITH THE PROVISION CONT AINED U/S.35(2AB) OF THE ACT READ WITH RULE 6, THE ASSESSEE ON 27.03.2012 HA D MADE AN APPLICATION TO THE DSIR FOR APPROVAL OF THE R & D FACILITY AND T HE DSIR HAS GRANTED SUCH APPROVAL IN FORM NO. 3CM. IN THIS CONTEXT, HE REFERRED TO A COPY OF THE SAID APPROVAL PLACED AT PG. 37 OF THE PAPER BOOK. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED , SINCE , IN THE SAID APPROVAL IN FORM NO. 3CM, IT IS MENTION ED THA T THE R & D FACILITY IS APPROVED W.E.F. 01.04.2002 UPTO 31.03.2014, IT CANNOT BE SAID THAT ASSESSEES CLAIM OF DEDUCTION U/S. 35(2AB) IS VALID ONL Y FROM ASSESSMENT YEAR 2013 - 14 AND NOT FOR THE IMPUGNED ASSESSMENT YEAR. THE LD. AUTHORIZED REPRESENTATIVE SUB MITTED , THE PROVISIONS OF SECTION 35(2AB) DOES NOT PROVIDE FOR ANY CUT OFF DATE WITH REGARD TO THE APPROVAL OF R & D FACILITY. THEREFORE, ONCE AN APPROVAL IN FORM 3CM IS GRANTED BY DSIR, THE ASSESSEE WOULD BE ELIGIBLE TO CLAIM DEDUCTION U/S. 35(2AB) OF THE ACT IN RESPECT OF THE EXPENDITURE INCURRED FOR R & D FACILITY AND R & D ACTIVITY. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED , ONCE THE DSIR HAS GRANTED REGISTRATION TO THE R & D FACILITY, EVEN IF FOR THE PURPOSE OF CENTRAL EXERCISE AND CUSTOMS, IT WILL A LSO BE APPLICABLE FOR CLAIMING DEDUCTION U/S. 6 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. 35(2AB) AS IT PROVES THE FACT THAT THE ASSESSEE HAS A RECOGNIZED R & D FACILITY. IN SUPPORT OF HIS CONTENTION, THE LD. AUTHORIZED REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS: 1. FERMENT BIOTECH LTD. (45 TA XMANN.COM 329) (MUM); 2. MARUTI SUZUKI INDIA LTD. (397 ITR 251)(MUM); 3. CLARIS LIFE SCIENCES LTD. (326 ITR 251)(DEL); 4. SADAN VIKAS (INDIA) LTD. 20 TAXMANN 216 (DEL) ; 5. MECO INSTRUMENTS PVT. LTD. (86 TAXMANN.COM 50); AND 6. VIVIMED LABS LTD. (66 TAXMANN.COM 94) 8. TH E LD. DEPARTMENTAL REPRESENTATIVE STRONGLY REL YING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SUBMITTED THAT THE FACT ON RECORD CLEARLY ESTABLISH THAT THE ASSESSEE HAS NOT OBTAINED APPROVAL IN THE PRESCR IBED MANNER FROM THE DSIR APPLICABLE TO THE IMPUGNED ASSESSMENT YEAR. HE SUBMITTED , THE APPROVAL GRANTED IN FORM 3CM BY DSIR CLEARLY STATES THAT SUCH APPROVAL IS EFFECTIVE FROM 01.04.2012 TO 31.03.2014. THAT BEING THE CASE, ASSESSEES CLAIM OF DEDUCTION U/ S. 35(2AB) OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR CANNOT BE ALLOWED. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE REGISTRATION CERTIFICATE GRANTED BY THE DSIR ON 02.06.2011 IS FOR THE LIMITED PURPOSE OF AVAILING CUSTOMS AND CENTRAL EXERCISE DUTY EXEMPTION, WHICH MAY BE NECESSARY FOR IMPORTING PLANT AND MACHINERY FOR SETTING UP R & D FACILITY. HOWEVER, THE REGISTRATION CERTIFICATE DOES NOT COMPLY WITH THE REQUIREMENT OF SECTION 35(2AB) R/W RULE 6. HE SUBMITTED , SINCE THERE IS NO APPROVAL BY THE PR ESCRIBED AUTHORITY IN FORM 3C M FOR THE IMPUGNED 7 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. ASSESSMENT YEAR, ASSESSEES CLAIM OF DEDUCTION U/S. 35(2AB) OF THE ACT CANNOT BE ALLOWED. IN SUPPORT OF SUCH CONTENTION, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE O F FERMENT BIOTECH LTD. (SUPRA). 9. WE HAVE PATIENTLY AND CAREFULLY HEARD THE PARTIES AND CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE MATERIAL ON RECORD AS WELL AS THE DECISIONS CITED BEFORE US. AS COULD BE SEEN FROM THE FACTS O N RECORD, THE ASSESSEE HAS IN - HOUSE R & D FACILITY AND HAS CLAIMED THE EXPENDITURE INCURRED IN RESPECT OF SUCH R & D FACILITY, BOTH R EVENUE AND CAPITAL , AS W EIGHTED DEDUCTION U/S. 35(2AB) OF THE ACT. A READING OF SECTION 35(2AB) MAKES IT CLEAR THAT ANY EXP ENDITURE INCURRED BY A COMPANY ENGAGED IN THE BUSINESS OF SPECIFIED BIOTECHNOLOGY OR MANUFACTURING OR PRODUCTION OF SPECIFIED ARTICLE , ON SCIENTIFIC RESEARCH IN IN - HOUSE RESEARCH AND DEVELOPMENT FACILITY APPROVED BY THE PRESCRIBED AUTHORITY , SHALL B E ELIGI BLE FOR DEDUCTION OF A SUM EQUIVALENT TO TWO TIMES OF THE EXPENDITURE INCURRED. HOWEVER, SUB SECTION (3) OF SECTION 35 POSTULATES THAT THE PRESCRIBED AUTHORITY SHALL SUBMIT ITS RETURN IN RELATION TO THE APPROVAL OF THE FACILITY TO THE CONCERNED AUTHORITY I N SUCH F O RM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. RULE 6 OF THE INCOME TAX RULES PROVIDES THAT THE ASSESSEE FOR AVAILING DEDUCTION U/S. 35(2AB) SHALL SEE K AN APPROVAL FROM THE PRESCRIBED AUTHORITY BY F ILING AN APPLICATION IN FORM 3CK. UPON FILING OF S UCH AN APPLICATION, THE PRESCRIBED AUTHORITY IF IS SATISFIED THAT THE CONDITIONS PROVIDED IN RULE 6 AND SECTION 8 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. 35(2AB) ARE FULFILLED , SHALL GRANT APPROVAL IN FORM NO. 3CM. FROM THE FACTS ON RECORD, IT IS EVIDENT THAT , THOUGH , THE R & D FACILITY OF THE ASS ESSEE WAS REGISTERED WITH DSIR ON 02.06.201 1 , HOWEVER, THAT REGISTRATION IS ONLY FOR THE PURPOSE OF AVAILING CUSTOMS AND CENTRAL EXERCISE DUTY EXEMPTION. THIS REGISTRATION CERTIFICATE GRANTED BY DSIR ON 02.06.2011 IS NOT IN COMPLIANCE TO THE CONDITIONS PRE SCRIBED EITHER U/S. 35(2AB) OR UNDER RULE 6. IT IS FURTHER EVIDENT , IN TERMS OF RULE 6 OF THE INCOME TAX RULES, THE ASSESSEE ON 27.03.2012 MADE AN APPLICATION IN FORM NO. 3CK FOR GRANT OF APPROVAL U/S. 35(2AB) OF THE ACT. 10. IN DUE CONSIDERATION OF THE AFORE - SAID APPLICATION O F THE ASSESSEE , SIENTIST G , DSIR , GRANTED APPROVAL IN FORM NO. 3CM FOR THE RESEARCH AND DEVELOPMENT FACILITY W.E.F 01.04.2012 UPTO 31.03.2014 FOR THE PURPOSE OF SECTION 35(2AB) OF THE ACT . I T IS RELEVANT TO NOTE THAT THE ASSESSING O FFICER IN PARA 5.7 OF HIS ORDER H AS REFERRED TO CERTIFICATE ISSUED BY THE PRESCRIBED AUTHORITY IN FORM 3CL DATED 12.11.2014 GRANTING APPROVAL FOR ASSESSMENT YEAR 2013 - 14. THUS, AS COULD BE SEEN FROM THE FACTS ON RECORD, THE DEPARTMENTAL AUTHORITIES HAVE DE NIED ASSESSEES CALIM ON THE REASONING THAT FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAS NOT OBTAINED APPROVAL FROM THE PRESCRIBED AUTHORITY IN FORM NO. 3CM WHICH IS A CONDITION PRECEDENT FOR AVAILING DEDUCTION U/S .35(2AB) OF THE ACT. IN CASE OF FERM ENT BIOTECH LTD. (SUPRA), THE CO - ORDINATE BENCH WHILE CONSIDERING IDENTICAL ISSUE HAS HELD EVEN IF FOR SUBSEQUENT ASSESSMENT YEARS THE APPROVAL IN FORM NO. 3CM IS AVAILABLE IN RESPECT OF THE 9 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. RESEARCH AND DEVELOPMENT FACILITY OF THE ASSESSEE THEN ALSO THE A SSESSEE HAS TO SHOW THAT ORDER OF APPROVAL FOR IN - HOUSE R & D FACILITY HAS BEEN GRANTED BY THE DSIR COVERING THE IMPUGNED ASSESSMENT YEAR. F OLLOWING THE AFORE - SAID DECISION, THE ITAT HYDERABAD BENCH IN THE CASE OF VIVIMED LABS LTD. (SUPRA), HAS HELD THAT THE ASSESSEE HAS TO OBTAIN APPROVAL IN FORM 3C M FOR THE ASSESSMENT YEAR FOR WHICH IT HAS CLAIMED U/S.35(2AB) OF THE ACT. HOWEVER, AS COULD BE SEEN , THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CLARIS LIFESCIENCES LTD. (SUPRA) HELD THAT THE PROVISION OF SE CTION 35(2AB) OF THE ACT NOWHERE SUGGEST OR IMPLY THAT THE R & D FACILITY IS TO BE APPROVED FROM A PARTICULAR DATE. THE HONBLE HIGH COURT HELD THAT AS PER THE PLAIN READING OF THE PROVISION, IF THE ASSESSEE HAS DEVELOPED R & D FACILITY IT PRE - SUPPOSES INC URRING OF EXPENDITURE. IN THIS BEHALF THE ASSESSEE HAS TO MAKE AN APPLICATION TO THE PRESCRIBED AUTHORITY WHO AFTER FOLLOWING THE PROPER PROCEDURE WILL APPROVE THE FACILITY OR OTHERWISE. THUS, IT WAS HELD, ONCE THE R & D FACILITY IS APPROVED BY THE PRESCRI BED AUTHORITY, ALL EXPENDITURES INCURRED IN RESPECT OF THE R & D FACILITY WILL BE ELIGIBLE FOR WEIGHTED DEDUCTION. I N THE CASE OF SADAN VIKAS (INDIA) LTD. (SUPRA), THE HONBLE DELHI HIGH COURT FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CLARIS LIFESCIENCES LTD. (SUPRA) HAS HELD THAT THE PROVISION OF SECTION 35(2AB) NOWHERE SUGGEST OR IMPLY THAT THE RESEARCH AND DEVELOPMENT FACILITY IS TO BE APPROVED FROM A P ARTICULAR DATE. IN OTHER WORDS, IT IS NO WHERE SUGGE STED THAT TH E DATE OF APPROVAL WILL BE THE CUT OFF DATE FROM WHICH ASSESSEE WILL BE ELIGIBLE TO CLAIM DEDUCTION ON THE EXPENSES INCURRED ON RESEARCH AND DEVELOPMENT FACILITY. THE 10 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. HONBLE HIGH COURT HAS HELD , ONCE THE R & D FACILITY IS APPROVED , THE EXPENDITURE INCURRE D ON DEVELOPMENT OF R & D FACILITY HAS TO BE ALLOWED AS WEIGHTED DEDUCTION U/S. 35(2AB) OF THE ACT. IN THE FACTS OF THE PRESENT CASE, THERE IS NO DISPUTE THAT THE IN - HOUSE R & D FACILITY OF THE ASSESSEE HAS BEEN APP ROVED BY THE DS IR IN F ORM 3C M . THE DISPUT E IS ONLY WITH REGARD TO THE ASSESSMENT YEAR FROM WHICH THE APPROVAL WILL APPLY. IT IS THE SAY OF THE DEPARTMENT THAT SINCE THE APPROVAL IS EFFECTIVE FROM 01.04.2012, THE DEDUCTION U/S. 35(2AB) WILL BE AVAILABLE TO THE ASSESSEE ONLY FROM ASSESSMENT YEAR 20 12 - 13. HOWEVER, APPLYING THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT AND HONBLE GUJARAT HIGH COURT IN THE DECISIONS REFERRED TO ABOVE, IT HAS TO BE CONCLUDED THAT IN THE ABSENCE OF ANY CUTOFF DATE SUGGESTED IN SECTION 35(2AB), THE ONLY THING WHICH IS REQUIRED TO BE SEEN IS THE APPROVAL IN FORM NO. 3C M BY THE PRESCRIBED AUTHORITY AND ONCE THAT APPROVAL IS IN PLACE, THE ASSESSEE WIL L BE ELIGIBLE TO CLAIM DEDUCTION OF THE EXPENDITURE INCURRED IN RESPECT OF THE R & D FACILITY UNDER SECTION 35(2AB) OF T HE ACT . IN THE PRESENT CASE, THERE IS NO DOUBT WITH REGARD TO THE FACT THAT THE ASSESSEE HAS INCURRED AN EXPENDITURE OF RS.1,30,32,700/ - ON THE R & D FACILITY. IN FACT, THE DEPARTMENT ALSO DOES NOT DIS PUTE THESE FACTS AS THE ASSESSING OFFICER HAS ALLOWED D EDUCTION OF 100% OF THE EXPENDITURE CLAIMED. THE ONLY DISPUTE IS WITH REGARD TO THE WEIGHTED DEDUCTION CLAIMED U/S. 35(2AB). THEREFORE, KEEPING IN VIEW THE RATIO LAID DOWN IN THE DECISION S OF THE HONBLE GUJARAT HIGH COURT AND HONBLE DELHI HIGH COURT, REF ERRED TO ABOVE, WE ALLOW ASSESSEES CLAIM OF DEDUCTION U/S. 35(2AB) OF THE ACT. THE GROUND RAISED IS ALLOWED. 11 ITA NO. 5284/MUM/2016 AGAPPE DIAGNOSTICS LTD. 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.05.2018 SD/ - SD/ - ( RAJESH KUMAR ) (S A KTIJIT DEY ) / A CCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 18.5.2018 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARD ED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI