Hitachi Hi-Rel Power Electronics Pvt. Ltd.,, Ahmedabad v. The Dy. CIT, Circle-2(1)(1),, Ahmedabad

ITA 3672/AHD/2015 | 2012-2013
Pronouncement Date: 27-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 367220514 RSA 2015
Assessee PAN AAACH3875M
Bench Ahmedabad
Appeal Number ITA 3672/AHD/2015
Duration Of Justice 3 year(s) 10 month(s) 28 day(s)
Appellant Hitachi Hi-Rel Power Electronics Pvt. Ltd.,, Ahmedabad
Respondent The Dy. CIT, Circle-2(1)(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2019
Appeal Filed By Assessee
Tags Section 35(2AB)
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 27-11-2019
Date Of Final Hearing 25-11-2019
Next Hearing Date 25-11-2019
Last Hearing Date 07-10-2019
First Hearing Date 01-07-2019
Assessment Year 2012-2013
Appeal Filed On 30-12-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI WASEEM AHMED ACCOUNTANT MEMBER ITA NOS. 3672/AHD/2015 AND 2925/AHD/2016 ASSESSMENT YEAR : 2012-13 & 2013-14 HITACHI HI-REL POWER ELECTRONICS PVT. LTD. B-52 & 62 5 TH FLOOR CORPORATE HOUSE NEAR JUDGES BUNGALOW CROSS-ROADS BODAKDEV AHMEDABAD-54 PAN : AAACH 3875 M VS DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 2 (1)(1) AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI DHINAL SHAH AR REVENUE BY : SHRI DILEEP KUMAR SR SR / DATE OF HEARING : 25/11/2019 / DATE OF PRONOUNCEMENT: 27/11/2019 / O R D E R PER RAJPAL YADAV JUDICIAL MEMBER :- THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEE AGAINST THE ORDERS OF LEARNED CIT(A) DATED 2 ND NOVEMBER 2015 AND 6 TH SEPTEMBER 2016 PASSED FOR ASSESSMENT YEARS 2012-13 AND 2013-14 RESPECTIVELY. 2. THE ASSESSEE HAS TAKEN THREE GROUNDS OF APPEAL; OUT OF WHICH IN GROUND NOS. 2 & 3 IN BOTH THE ASSESSMENT YEARS IT H AS PLEADED THAT THE REVENUE AUTHORITIES HAS ERRED IN CHARGING INTEREST UNDER SECTION 234B & 234C OF THE ACT AS WELL AS THEY HAVE ERRED IN INITI ATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) IN BOTH THE ASSESSMENT YEAR S. 3. AT THE TIME OF HEARING IT WAS PLEADED AS FAR A S CHARGING OF INTEREST IS CONCERNED IT IS CONSEQUENTIAL IN NATURE; THEREFORE THERE IS NO SPECIFIC ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 2 FINDING IS REQUIRED TO BE RECORDED. SIMILARLY AS FAR AS INITIATION OF PENALTY IS CONCERNED WE ARE OF THE VIEW THAT IT IS A PREMATUR E GROUND AT THIS STAGE. THE ASSESSEE WILL GET AN INDEPENDENT OPPORTUNITY FO R DISPUTING OF LEVY OF ANY PENALTY UNDER SECTION 271(1)(C) OF THE ACT; HEN CE THIS GROUND OF THE ASSESSEE IS ALSO REJECTED. IN THE RESULT GROUND N OS. 2 & 3 IN BOTH THE ASSESSMENT YEARS ARE REJECTED. 4. IN GROUND NO.1 THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.48 7 9 636/- AND RS.69.12 LAKHS IN ASSESSMENT YEARS 2012-13 AND 2013-14 RESPE CTIVELY. 5. THE FACTS ON ALL VITAL POINTS ARE COMMON; THEREF ORE FOR FACILITY OF REFERENCE MAINLY WE ARE TAKING UP THE FACTS FROM TH E ASSESSMENT YEAR 2012- 13. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND PROVID ING SOLUTION FOR PRODUCTS LIKE UNINTERRUPTED POWER SUPPLY (UPS) DRI VES AND AUTOMATION. IT HAS FILED ITS RETURN OF INCOME FOR AY 2012-13 ON 29.11.2012 DECLARING TOTAL INCOME OF RS.6 22 90 348/-. THE ASSESSEE HAD CLAIME D A DEDUCTION OF RS.4 83 90 786/- UNDER SECTION 35(2AB) OF THE ACT B EING WEIGHTED DEDUCTION @ 200% OF EXPENDITURE INCURRED FOR THE PURPOSE OF R ESEARCH AND DEVELOPMENT AT RS.2 41 95 393/-. SIMILARLY IN ASS ESSMENT YEAR 2013-14 IT HAS CLAIMED DEDUCTION OF RS.705.86 LAKHS UNDER SECT ION 35(2AB) OF THE ACT. THE AMOUNT OF RS.2 41 95 393/- IN ASSESSMENT YEAR 2 012-13 INCLUDES CAPITAL EXPENDITURE OF RS.17 09 557/- IN RESPECT OF RESEARC H AND DEVELOPMENT. THE LEARNED ASSESSING OFFICER HAS ANALYZED THE ANNEXURE S-5A AND 5F ENCLOSED BY THE ASSESSEE WITH THE AUDIT REPORT WHEREIN THE D ETAILS OF THESE EXPENDITURES WERE SHOWN. HE OBSERVED THAT THE AUDI TOR HAS PUT QUALIFYING REMARKS AGAINST THE CLAIM MADE UNDER SECTION 32(2AB ) OF THE ACT. LEARNED ASSESSING OFFICER HAS NOTICED THE REMARKS MADE BY T HE AUDITOR AS WELL AS ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 3 DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR). HE DISALLOWED A SUM OF RS.48 79 636/- IN ASSESSMENT YEAR 2012-13 AN D RS.69.12 LAKHS IN ASSESSMENT YEAR 2013-14. THE FINDINGS RECORDED BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2012-13 READ AS UNDER:- 3.2 IN THIS REGARD ANNEXURE 5A TO 5F ENCLOSED BY FOE ASSESSEE WAS ALSO PERUSED. FURTHER THE AUDIT REPORT AS SUBMITTED BY THE ASSESSEE AS PER ANNEXURE 5G HAS ALSO BEEN PERUSED. IN THIS REGARD RELEVANT PARA 2 3 & 4 OF THE AUDITOR'S REPORT IS REPRODUCED FOR THE SAKE OF CLARITY ON THE ISSUE. '2. WE CERTIFY THAT A) THE COMPANY HAS MAINTAINED SEPARATE ACCOUNTS FOR TH E R&D CENTRE RECOGNIZED BY DSIR U/S 35(2AB). B) THE ACCOUNTS HAVE BEEN SATISFACTORILY MAINTAINED. T HE EXPENDITURE CERTIFIED IS ALSO IN CONSONANCE WITH DSIR GUIDELINE S. C) THE FIRM-HAS EXTENDED FULL CO-OPERATION TO US IN CA RRYING OUT THE AUDIT OF THE ACCOUNTS OF THE R&D CENTRE. THE EXPENDITURE OF RS. 24 195 393/- REPORTED FOR TH E FINANCIAL YEAR 2011-12 RELEVANT TO THE ASSESSMENT YEAR 2012-13 AS DETAILED OUT IN APPENDIX II TO ANNEXURE IV OF DSIR GUIDELINES AT PARA A'4' IS CORR ECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF AS PER THE RESULT OF THE AUDIT OF THE RECOGNIZED R&D CENTRE CARRIED OUT BY US ON A TEST BASIS. ALSO COM MERCIAL SALE OF PRODUCTS DEVELOPED IN R&D CENTRE ARE REFLECTED ON PAGE 35 (I NCLUDED IN NOTE 19 REVENUE FROM OPERATIONS) R&D CAPITAL EXPENDITURE I S REFLECTED ON PAGE 31 (INCLUDED IN NOTE 12A AND 128 -TANGIBLE AND INTANGI BLE ASSETS) REVENUE EXPENDITURES ARE REFLECTED ON PAGE 36 (INCLUDED IN NOTE 21- COST OF RAW MATERIAL ARID COMPONENTS CONSUMED) PAGE 37 (INCLUD ED IN NOTE 23 - EMPLOYEE BENEFIT EXPENSES) AND PAGE 38 (NOTE 24 OTH ER EXPENSES) OF 21ST ANNUAL REPORT OF THE COMPANY. 4. IT IS FURTHER CERTIFIED THAT THE EXPENDITURE CLA IMS DO NOT INCLUDE THE FOLLOWING: I. EXPENDITURE ON OUTSOURCED R&D ACTIVITIES: II. EXPENDITURE PURELY RELATED TO MARKET RESEAR CH SALES PROMOTIONS QUALITY CONTROL TESTING COMMERCIAL PRODUCTION STYLE CHAN GES ROUTINE DATA COLLECTION OR ACTIVITIES OF A LIKE NATURE EXCEPT TE STING CHARGES AMOUNTING TO RS.135 050/- (REFER EXHIBIT IV OF APPENDIX II TO ANNEXURE 4) CARRIED OUTSIDE THE APPROVED PREMISES. III. LEASE RENT PAID FOR RESEARCH FARMS OR RESEA RCH LABS. ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 4 IV. EXPENDITURE ON FOUNDATION SEEDS MULTIPLICATION DEMONSTRATION CROPS AND GROW OUT TEST ETC. BEYOND BREEDER SEED DEVELOPM ENT. V. FOREIGN PATENT FILING EXPENDITURE. VI. FOREIGN CONSULTANCY EXPENDITURE. VII. BUILDING MAINTENANCE MUNICIPAL TAXES AND RE NTAL CHARGES BEING PAID. VIII. ANY INTEREST COMPONENT ON LOANS FOR R&D. IX. CLINICAL TRIAL ACTIVITIES CARRIED OUT OUTSID E THE RECOGNIZED FACILITIES. X. CONTRACT RESEARCH EXPENSES DUTY CERTIFIED BY CHARTERED ACCOUNTANT. XI. EXPENDITURE ON ANY PAYMENTS MADE TO MEMBERS OF THE BOARD OF DIRECTORS OR ANY OTHER PART TIME EMPLOYEES WORKING FOR R&D EX CEPT FOR REMUNERATION TO AN EXECUTIVE DIRECTOR APPOINTED IN PROFESSIONAL CAPACITY AMOUNTING TO RS.4 879 636/-.' 3.3 CONSIDERING THE ABOVE AUDIT REPORT AND THE DETA ILS SUBMITTED BY THE ASSESSES DURING THE E DISCUSSION HELD ON 12/12/201 4 THE A.R. OF THE ASSESSEE WAS ASKED TO FURNISH REPORT IN FORM 3CL ISSUED BY T HE DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH. IN RESPONSE TH E ASSESSEE SUBMITTED A REPLY ON 18/12/2014 AND SUBMITTED THE REPORT IN FOR M 3CL DATED 14/10/2014. FROM THE PERUSAL OF PARA 9 OF THE FORM 3D REPORT OF DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR) NEW D ELHI DATED 14/10/2014 IT IS EVIDENT THAT IN THE ASSESSMENT YEAR 2012-13 THE EXPENDITURE ELIGIBLE FOR DEDUCTION ON ACCOUNT OF R & D EXPENDITURE U/S. 35(2 A8) APPROVED BY THE DSIR WAS RS.19315757/- ONLY COMPRISING OF CAPITAL E XPENDITURE OF RS.1709557/- AND REVENUE EXPENDITURE OF RS.17606200 /-. THE DSIR HAS APPROVED THE FULL AMOUNT OF CAPITAL EXPENDITURE OF RS. 1709557/- AS R&D EXPENDITURE BUT RESTRICTED THE REVENUE EXPENDITURE TO RS.17606200/- AS AGAINST THE CLAIM OF THE REVENUE EXPENSES MADE BY T HE ASSESSEE AT RS.22485836/-. SINCE THE ASSESSEE HAS CLAIMED EXCES S EXPENDITURE OF RS.4879636 (22485836-17606200) ON ACCOUNT OF REVENU E EXPENDITURE THE DISALLOWANCE @ 200% U/S. 35(2AB) COMES TO RS.975927 2/-. HOWEVER THE ASSESSEE ITSELF HAS ADDED BACK A SUM OF RS.4879636/ - WHICH IS INCLUDED IN THE AMOUNT OF RS.22485836/- THE NET DISALLOWANCE COMES TO RS.4879636 (RS.9759272 - RS.4879636). IN VIEW OF THE ABOVE A SUM OF RS.4879636/- IS DISALLOWED U/S. 35(2AB) OF THE IT ACT AND ADDED BAC K TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IS BEING INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 6. APPEAL TO THE LEARNED CIT(A) DID NOT BRING ANY R ELIEF TO THE ASSESSEE. ON SAME ANALOGY THE CLAIM OF THE ASSESSEE TO THE E XTENT OF RS.69.12 LAKHS HAS BEEN DISALLOWED IN ASSESSMENT YEAR 2013-14. ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 5 7. LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUGNIN G THE ORDERS OF THE REVENUE AUTHORITIES CONTENDED THAT THE SALARY PAID TO ONE OF THE DIRECTORS WHICH HAS BEEN CONSIDERED FOR DISALLOWANCE WAS NOT PAID FOR THE CAPACITY OF HIS DIRECTORSHIP RATHER IT WAS PAID ON ACCOUNT OF PROFESSIONAL QUALIFICATION POSSESSED BY HIM WHICH AUTHORIZES HIM TO UNDERTAKE THE RESEARCH ACTIVITY AND HELPING THE RESEARCH TEAM. H E TOOK US THROUGH THE QUALIFICATION REMARKS PUT BY THE AUDITOR AT SR. NO. XI AND POINTED OUT THAT AUDITORS HAVE POINTED OUT THAT EXCLUSION OF EXPENDI TURE INCURRED ON ANY PAYMENTS MADE TO MEMBERS OF THE BOARD OF DIRECTORS OR ANY OTHER PART TIME EMPLOYEES WORKING FOR R&D BUT EXEMPTION HAS BEEN C ARVED OUT WHEREIN IF REMUNERATION IS BEING PAID TO ANY EXECUTIVE DIRECTO R APPOINTED IN PROFESSIONAL CAPACITY THEN THAT WOULD NOT BE DISAL LOWED. THE DSIR FAILED TO APPRECIATE THIS ASPECT WHILE RESTRICTING THE ALL OWANCE. HE FURTHER CONTENDED THAT THIS ASPECT HAS BEEN CONSIDERED BY T HE ITAT AHMEDABAD BENCH AS WELL AS ITAT PUNE BENCH. HE DREW OUR ATT ENTION TO THE ORDER OF THE ITAT AHMEDABAD BENCH IN THE CASE OF ACIT VS. T ORRENT PHARMACEUTICALS LTD REPORTED IN [2012] 137 ITD 301 AS WELL AS ITAT PUNE BENCHS ORDER IN THE CASE OF CUMMINS INDIA LIMITED VS. DCIT IN ITA NO. 309/PUN/2014. HE PLACED ON RECORD COPIES OF BOTH TH ESE DECISIONS. ON THE STRENGTH OF ABOVE HE PRAYED THAT THE DISALLOWANCE BE DELETED. 8. ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED T HAT THE ASSESSING OFFICER HAS NO JURISDICTION TO DISTURB THE CERTIFICATE GRAN TED BY DSIR FOR ALLOWANCE OF EXPENDITURE. THIS CERTIFICATE HAS TO BE SUBMITT ED ON YEAR TO YEAR BASIS. 9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. AS FAR AS THE EXISTENCE OF R&D F ACILITY AT THE BUSINESS ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 6 PREMISES OF THE ASSESSEE IS CONCERNED IT IS NOT IN DISPUTE. IT HAS ALSO NOT BEEN DISPUTED THAT THIS FACILITY HAS AN APPROVAL FROM TH E COMPETENT AUTHORITY I.E. DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (D SIR). THE DISPUTE RELATES TO QUANTIFICATION OF REVENUE EXPENDITURE WHICH CAN BE ALLOWED TO THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER THE SALARY PAID TO EXECUTIVE DIRECTOR HAS NOT BEEN APPROVED BY DSIR IN THE REPORT SUBMITTED I N FORM NO.3CL. THEREFORE IT IS NOT ADMISSIBLE. THIS VIEW POINT HA S BEEN FURTHER FORTIFIED BY THE ASSESSING OFFICER WITH THE HELP OF THE AUDITORS RE MARKS IN AUDIT REPORT. IT IS PERTINENT TO OBSERVE THAT EXACTLY IDENTICAL ASPECT HAS BEEN CONSIDERED BY THE ITAT PUNE BENCH IN THE CASE OF CUMMINS INDIA LTD ( SUPRA) AND FOLLOWING FINDINGS ARE WORTH TO NOTE:- 45. THE ISSUE WHICH IS RAISED IN THE PRESENT APPE AL IS THAT WHETHER WHERE THE FACILITY HAS BEEN RECOGNIZED AND NECESSARY CERTIFIC ATION IS ISSUED BY THE PRESCRIBED AUTHORITY THE ASSESSEE CAN AVAIL THE DE DUCTION IN RESPECT OF EXPENDITURE INCURRED ON IN-HOUSE R&D FACILITY FOR WHICH THE ADJUDICATING AUTHORITY IS THE ASSESSING OFFICER AND WHETHER THE PRESCRIBED AUTHORITY IS TO APPROVE EXPENDITURE IN FORM NO.3CL FROM YEAR TO YEA R. LOOKING INTO THE PROVISIONS OF RULES IT STIPULATES THE FILING OF AU DIT REPORT BEFORE THE PRESCRIBED AUTHORITY BY THE PERSONS AVAILING THE DEDUCTION UND ER SECTION 35(2AB) OF THE ACT BUT THE PROVISIONS OF THE ACT DO NOT PRESCRIBE ANY METHODOLOGY OF APPROVAL TO BE GRANTED BY THE PRESCRIBED AUTHORITY VIS--VIS EXPENDITURE FROM YEAR TO YEAR. THE AMENDMENT BROUGHT IN BY THE IT (TENTH AME NDMENT) RULES W.E.F. 01.07.2016 WHEREIN SEPARATE PART HAS BEEN INSERTED FOR CERTIFYING THE AMOUNT OF EXPENDITURE FROM YEAR TO YEAR AND THE AMENDED FORM NO.3CL THUS LAYS DOWN THE PROCEDURE TO BE FOLLOWED BY THE PRESCRIBED AUTH ORITY. PRIOR TO THE AFORESAID AMENDMENT IN 2016 NO SUCH PROCEDURE / METHODOLOGY WAS PRESCRIBED. IN THE ABSENCE OF THE SAME THERE IS NO MERIT IN THE ORDER OF ASSESSING OFFICER IN CURTAILING THE EXPENDITURE AND CONSEQUENT WEIGHTED DEDUCTION CLAIM UNDER SECTION 35(2AB) OF THE ACT ON THE SURMISE THAT PRESCRIBED AUTHORIT Y HAS ONLY APPROVED PART OF EXPENDITURE IN FORM NO.3CL. W E FIND NO MERIT IN THE SAID ORDER OF AUTHORITIES BELOW. 10. IN THE LIGHT OF ABOVE FINDINGS IF WE EXAMINE T HE FACTS OF THE PRESENT CASE THEN IT WOULD REVEAL THAT THE AUDITORS HAVE CARVED OUT AN EXEMPTION AND OBSERVED THAT IF EXECUTIVE DIRECTOR HAS BEEN EMPLOY ED IN HIS PROFESSIONAL CAPACITY THEN THE EXPENDITURE INCURRED ON HIS SALA RY WILL NOT BE CONSIDERED FOR ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 7 DISALLOWANCE. THE DSIR WITHOUT MAKING AN ANALYSIS OF THIS EXPENDITURE HAS RESTRICTED THE ALLOWANCE. IN OTHER WORDS AN EXPEN DITURE OF RS.48 79 636/- WAS NOT APPROVED FOR GRANT OF DEDUCTION IN ASSESSMENT Y EAR 2012-13 AND RS.69.12 LAKHS IN ASSESSMENT YEAR 2013-14. ACCORDING TO ITAT -PUNE PRIOR TO AMENDMENT MADE IN THE DETAILS REQUIRED TO BE COMPIL ED IN FORM NO.3CL WITH EFFECT FROM 1 ST JULY 2016 THERE WAS NO SUCH POWER WITH DSIR TO RE STRICT SUCH ALLOWANCE. HOWEVER WE HAVE DIRECTED THE LEARNED C OUNSEL FOR THE ASSESSEE TO POINT OUT THE PROFESSIONAL QUALIFICATION OF THE EXE CUTIVE DIRECTOR AND WHAT ROLE HE HAS PLAYED IN THE RESEARCH ACTIVITY SO THAT HE C AN BE EXCLUDED FROM THE REMARKS OF THE AUDITORS WHICH HAS BEEN ACCEPTED BY THE DSIR. WE FIND THAT NO SUCH DETAILS HAVE BEEN PLACED IN THIS CONNECTION EI THER BEFORE THE LEARNED ASSESSING OFFICER OR BEFORE THE LEARNED CIT(A). BE FORE US LEARNED COUNSEL FOR THE ASSESSEE SOUGHT TO PRODUCE JOB DESCRIPTION OF M R. DHIRAN R. SHAH WHO HAS BEEN HIRED AS CHIEF TECHNOLOGY OFFICER. HE HAS BEEN STATED TO BE HOLDING QUALIFICATION OF BE (ELECTRICAL ENGINEERING) GUJAR AT UNIVERSITY AND MS (EE) MODERN CONTROL SYSTEMS & ROBOTICS PURDUE UNIVERSIT Y USA. TO OUR MIND WHEN THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE THEN AT THE FIRST AVAILABLE TIME BEFORE THE FIRST APPELLATE AUT HORITY THE ASSESSEE OUGHT TO HAVE PRODUCED ALL THESE DETAILS SO THAT A REPORT CO ULD BE CALLED FOR FROM THE ASSESSING OFFICER AND IT COULD BE ASCERTAINED HIS A CTUAL ROLE IN THE RESEARCH ACTIVITY. HOWEVER WE FIND THAT IN EARLIER YEARS NO SUCH DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER EVEN IN SCRUTINY AS SESSMENT. THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2011-12 HAS BEEN PLACED O N RECORD. A PERUSAL OF THIS ORDER WOULD INDICATE THAT THERE IS NO DISCUSSION ON THE CLAIM MADE UNDER SECTION 13(2AB) OF THE ACT. IN OTHER WORDS IT IS NOT ASCERTAINABLE WHETHER ANY CLAIM WAS AVAILABLE IN THAT YEAR OR NOT. FACED WIT H ABOVE SITUATION AND IN THE INTEREST OF JUSTICE WE DEEM IT APPROPRIATE TO REMI T THIS ISSUE TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EVIDENCE EXHIBITING THE ROLE OF MR. D HIRAN SHAH AS AN EXECUTIVE ITA NOS. 3672/AHD/2015 & 2925/AHD/2016 HITACHI HI-REL POWER ELECTRONICS PVT LTD VS. DCIT AYS : 2012-13 & 2013-14 8 DIRECTOR-CUM-CHIEF TECHNOLOGY OFFICER HELPING THE R ESEARCH ACTIVITY. IN CASE IT IS ESTABLISHED THAT HE WAS HIRED IN THE RESEARCH AC TIVITY RELATED WORK AND HE HAS PLAYED AN ACTIVE ROLE IN THE RESEARCH OPERATIONS T HEN THE EXPENDITURE INCURRED TOWARDS HIS SALARY WILL QUALIFY FOR GRANT OF DEDUCT ION UNDER SECTION 35(2AB) OF THE ACT. THE LEARNED ASSESSING OFFICER SHALL RE-ADJ UDICATE THIS ISSUE AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. 12. IN THE RESULT BOTH APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 27 TH NOVEMBER 2019 AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED 27/11/2019 *BT / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '! / THE RESPONDENT. 3. & ( / CONCERNED CIT 4. ( ) ( / THE CIT(A)- 5. & & /DR ITAT AHMEDABAD 6. 1 / GUARD FILE. / BY ORDER TRUE COPY (ASSTT. REGISTRAR) & ITAT AHMEDABAD 1. DATE OF DICTATION- 26.11.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.11.2019 OTHER MEMBER 27.11.2019. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 27.11.2019 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 27.11.2019.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK27.1 1.2019 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 8. DATE OF DESPATCH OF THE ORDER