Allowabilty of Scientific Research Expenditure ::

Court :
Tribunal

Brief :
Held that it is not mandatory under provisions of section 35(1)(iv) that plant and machinery purchased must be put to use. It is enough that the expenditure is incurred on purchase of plant and machinery to be used in research work. Hence, A.O. is not justified in disallowing deduction to the assessee.

Citation :
D.C.I.T. Vs. Metallizing Equipment Co. (P.) Ltd.

Allowabilty of Scientific Research Expenditure D.C.I.T. Vs. Metallizing Equipment Co. (P.) Ltd. 11/18/2004 IT APPEAL NO. 115, 116 AND 248 (JODH.) OF 1998 Case Fact: Whether A.O. is right in disallowing claim for deduction u/s 35(1)(iv) for capital expenditure on research and development on ground that the assets purchased was not used during the year. Decision: Held that it is not mandatory under provisions of section 35(1)(iv) that plant and machinery purchased must be put to use. It is enough that the expenditure is incurred on purchase of plant and machinery to be used in research work. Hence, A.O. is not justified in disallowing deduction to the assessee.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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