| Case ID |
25979806-fe80-438e-93be-cfe065752cf0 |
| Body |
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| Case Number |
Case Referred No 62 of 1990 |
| Decision Date |
Aug 17, 1998 |
| Hearing Date |
|
| Decision |
The Tribunal was justified in law in affirming the order of the Commissioner of Income-tax (Appeals) allowing 50 per cent. of the cost of equipment as attributable to research, on the view that the research and development in the case of the assessee in electronic business was a continuous process and all the research and development was a preparation for commercial production. The Tribunal held that the transactions in dispute were not hundis, and section 69D was not applicable. The court confirmed the Tribunal's decision, stating that as long as expenditure is related to scientific research, the assessee is entitled to claim deductions, as the law does not require that the expenditure be wholly and exclusively for research and development. |
| Summary |
In the case of Commissioner of Income Tax vs. Yamuna Digital Electronics (P.) Ltd., the High Court addressed critical issues regarding the applicability of deductions under the Indian Income Tax Act, particularly concerning scientific research expenditures. The court ruled that the Income Tax Appellate Tribunal was correct in allowing a deduction for 50% of the cost of equipment used for research, emphasizing that the law does not mandate that such expenses be exclusively for research purposes. The case also involved discussions on the classification of certain transactions as hundis under section 69D, with the Tribunal's findings being upheld that these transactions did not fall under the definition of hundis. This case highlights important precedents in understanding the scope of tax deductions for scientific research and the interpretation of financial transactions under tax law, making it significant for tax practitioners and businesses engaged in research and development activities. |
| Court |
High Court
|
| Entities Involved |
YAMUNA DIGITAL ELECTRONICS (P.) LTD.
|
| Judges |
MS. S. V. MARUTHI,
R. BAYAPU REDDY
|
| Lawyers |
S.R. Ashok,
S. Ravi
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
YAMUNA DIGITAL ELECTRONICS (P.) LTD.
|
| Citations |
2001 SLD 44,
2001 PTD 282,
(1999) 238 ITR 717
|
| Other Citations |
CIT v. Dexan Pharmaceuticals (Pvt.) Ltd. (1995) 214 ITR 576 (AP)
|
| Laws Involved |
Indian Income Tax Act, 1961
|
| Sections |
35,
69D
|