Friday, May 18, 2018

ITAT : Pre-2016, AO can't curtail R&D unit's weighted deduction u/s 35(2AB) citing DSIR-approved expenditure

Pune ITAT rejects Revenue’s plea for AY 2009-10 that deduction with respect to Research & Development (R&D) expenditure u/s 35(2AB) is restricted only to the extent of approval granted by Department of Industrial and Scientific Research (DSIR) in form No.3CL; ITAT​ clarifies that prior to amendment of IT (Tenth Amendment) Rules, 2016, DSIR had no power to quantify expenditure and highlights that issue under consideration relates to pre-amended provisions; ITAT notes that with effect from July 1, 2016 form no 3CL was amended  and certification of expenditure was inserted; ITAT rules that once agreement between the ​R&D facility and the prescribed authority is executed under which recognition is given to the facility, role of AO is to look into and allow the expenditure incurred on in-house R&D facility as weighted deduction u/s 35(2AB)​; ITAT thus allows weighted deduction for R&D facility's entire expenditure u/s 35(2AB) ​:ITAT 

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Delhi HC holds 10% pre-deposit requirement for penalty-only appeals inapplicable where SCN was issued before amendment

  This Tax Alert summarizes a recent ruling of the Delhi High Court (HC) [1] on whether the newly introduced pre-deposit requirement for fi...