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35(2AB)

02 June 2017

a co engaged in biomedicines converted 1 equipment which was being used for scientific research for business use.
cost= rs 15Lakh
co had already claimed dep @ 200%
the value of plant in block shall be??

nil??

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Ashish Gangawani (Chartered Accountant) (88 Points)
Replied 02 June 2017

Where a company engaged in the business of bio-technology or in any business of manufacture or production of any article or thing, not being an article or thing specified in the list of the Eleventh Schedule incurs any expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on inhouse research and development facility as approved by the prescribed authority, then, there shall be allowed a deduction of a sum equal to 200% of the expenditure so incurred upto 31.03.2017. Deduction under section 35(2AB) shall be allowed if the company enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfills prescribed conditions with regard to maintenance and audit of accounts and also furnishes prescribed reports. Such report is to be submitted to Principal Chief Commissioner or Chief Commissioner having jurisdiction over the company claiming the weighted deduction under this section. [The deduction shall be 150% of actual contribution made for AY 2018-19 to AY 2020-21 and 100% of actual contribution made from AY 2021-22 – Amendment vide Finance Act, 2016]. If the case is so as above, the addition in block shall be Nil.

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