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FATEMA (CHARTERED ACCOUNTANT) (719 Points)

27 January 2010

An individual makes a payment of Rs. 9000 to an approved institute u/s 35(1)(ii) for the purpose of carrying on a scientific research.However, the scientific research is not related to the business of the asessee.Will the asesse get deduction @ 100% or @ 125% u/s 35?

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27 Replies

Amir (Learner) (4016 Points)
Replied 27 January 2010

Dear Fatema,

The words "Related to business" are not there under clause (ii) of Sec 35(1),,

Therefore weighted deduction equal to 125% will be allowed.

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Max Payne (employed) (2574 Points)
Replied 27 January 2010

Hi,

As of now the assessee will get wighted deduction of 125% in computing PGBP, whether the research is connected to business or not....

FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 27 January 2010

So wen will asessee get 100% deduction?

Amir (Learner) (4016 Points)
Replied 27 January 2010

Dear Fatema,

What kind of query is this??

Here Law is giving benefit & u r not ready to accept.

FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 27 January 2010

Nothing like that Amir.we were taught that we get 100% deduction u/s 35 in certain cases.I could not recall those situations in which we get 100% deduction.that is why that query

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Amir (Learner) (4016 Points)
Replied 27 January 2010

Dear Fatema,

Sec 35(1)(i), Research other than approved institutions,etc willget 100% deduction ..

Simple.

Pragya Jha (Learner) (40 Points)
Replied 27 January 2010

Originally posted by : Amir
	Dear Fatema, The words "Related to business" are not there under clause (ii) of Sec 35(1),, Therefore weighted deduction equal to 125% will be allowed.

Correct....sir.....

RADHIKA JALAN (agarwal) (1521 Points)
Replied 27 January 2010

amir is right..........

Neha (Article) (118 Points)
Replied 27 January 2010

Yes, I too agree with Amir Pragya Jhaa....

dats absolutely ryt1!!

CA FaIyaZ PaTrAwaLa (CA) (276 Points)
Replied 27 January 2010

When any sum paid to an approved institute u/s 35(1)(ii) for the purpose of carrying on a scientific research.. e.g X co. paid sum of Rs.15000 to Y university (assumed Approved University) for Scientific research(SR). Now X Co. is eligible for 125% weighted deduction. then Y university incurred expenditure for SR suppose Rs. 10000 then Y university cannot get 125% deduction to avoid double deduction Y university can claim deduction upto Rs. 10000 i.e 100%

In the above situation there is 100% deduction.

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FATEMA (CHARTERED ACCOUNTANT) (719 Points)
Replied 27 January 2010

Thanks Faiyaz.This is what exactly my professor said.

Amir (Learner) (4016 Points)
Replied 27 January 2010

Dear Faiyaz,

Ya u r rite If Y spends it in house, but now my question is if University Y donates this sum of Rs. 10,000 to university Z(say approved), then University Y will get 125% or 100%..

Kashyap Joshi (Proprietor ) (260 Points)
Replied 27 January 2010

Originally posted by : Amir
	Dear Faiyaz, Ya u r rite If Y spends it in house, but now my question is if University Y donates this sum of Rs. 10,000 to university Z(say approved), then University Y will get 125% or 100%..

Nothing is specified i the law about forwarding funds cases (or even in case laws). Therefore if Y donates the same to Z, then Y will get 125% deduction on Rs. 10000/-.