INCOME TAX ACT, 1961

Section 35(1)(iv)

Business deduction under section 35(i)(iv) - Scientific research expenditure - Bolero purchased for prosecution of scientific research -

Assessee was a DRDO contractor engaged in research and development of high rate batteries and allied activities and the R & D unit has been accorded approval from the Ministry of Science & Technology. Assessee claimed 100% depreciation on the value of purchase of 'Bolero' and since MUV was not a scientific apparatus or a plant and machinery, AO allowed only 15% depreciation and the balance claim of depreciation was brought to tax. Held: Language used in Explanation given under section 43(4)(ii) is very wide and every capital expenditure incurred which facilitates prosecution of scientific research, falls within the definition of the Explanation and, consequently, the benefit of section 35(1)(iv) would be attracted. Accordingly, 'Bolero' purchased was the facility for prosecution of scientific research and therefore, assessee was entitled to benefit of section 35(1)(iv).

Followed:CIT v. Smith Kline & French (India) Ltd. (1994) 77 Taxman 153 (Karn-HC) : 1994 TaxPub(DT) 0066 (Karn-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 37(1)

SUBSCRIBE FOR FULL CONTENT