ITA Nos.2525 & 2826/Chny/2026 M/s. Anabond Ltd.

Parties Involved

Facts Summary

The assessee, M/s. Anabond Ltd., is a company engaged in the manufacturing and marketing of anaerobic adhesives and sealants. The case pertains to the disallowance of deductions and adjustments made by the Assessing Officer (AO) for the Assessment Years (AYs) 2017-18 and 2018-19. The AO disallowed deductions claimed under Section 35(2AB) of the Income Tax Act, 1961, as the expenditure was not approved by the Department of Scientific and Industrial Research (DSIR). The assessee appealed against these orders, arguing that the uncertified amount should be eligible for deduction under Sections 35(1)(i) and 35(1)(iv) of the Act. The assessee also contested disallowances made under Sections 14A and 40(a)(ii) of the Act.…

Legal Issues

• 1. Denial of deduction u/s. 35 (2AB) of the Act in excess of DSIR approval – AY 2017-18 & 2018-19.
• 2. Without prejudice to (1) above the amount disallowed u/s. 35(2AB) of the Act to be allowed under section 35(1)(iv)/37(1) of the Act – AYs. 2017-18 & 2018-19.
• 3. Disallowance u/s. 14A r.w Rule 8D of the Income Tax Rules – AY 2017-18.
• 4. Adjustment of disallowance made u/s. 14A r/w Rule 8D of the Rules while computing the book profits u/s. 115JB of the Act – AY 2017-18.
• 5. Disallowance u/s. 40(a)(ii) of the Act – AY 2017-18.

Judgment Outcome

Decided in favour of Assessee.

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