M/S AXIOM RESEARCH LABS PRIVATE LIMITED Vs. ACIT, CIRCLE 3(2), NEW DELHI

Parties Involved

Facts Summary

The assessee, M/S AXIOM RESEARCH LABS PRIVATE LIMITED, filed its original return of income on 11.10.2016 declaring a total loss of Rs. 13,62,87,264/-. The return was selected for 'Limited Scrutiny' under CASS due to discrepancies such as gross total income being less than the value of foreign remittances sent, receipt of large value foreign remittance and low/nil business income, large deduction claimed under section 35(1) of the Income Tax Act, 1961, and large outward remittances to a non-resident not being a company or to a foreign company. The assessee claimed deduction on account of scientific research under section 35 of the Income Tax Act. The Assessing Officer observed that the assessee had claimed the costs incurred in relation to Research and Development have been capitalized in the books of accounts as 'intangible', however, no details of intangible entries in books of accounts have been provided. The Assessing Officer disallowed the claim made by the assessee under section 35(1)(i) of the Act related to scientific research amounting to Rs.5,21,07,634/-.…

Legal Issues

• 1. Whether the Assessing Officer was justified in disallowing the deduction claimed by the assessee under section 35(1)(i) of the Act?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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