Preliminary expense deduction stays company-specific, with REIT trust IPO and listing costs treated as outside section 35D relief.

Section 35D is described as allowing amortisation of preliminary expenses, but expenditure on public subscription, underwriting, brokerage, prospectus and related listing costs is treated in the text as confined by section 35D(2)(c) to a company. The note explains that a REIT constituted as a trust remains a distinct fiscal category under the Income-tax Act and cannot, by liberal or harmonious construction, be equated with a company or have its units treated as shares or debentures. It further states that substance over form does not override an express statutory limitation. On that basis, the text records that deduction under section 35D(2)(c) was not available to the REIT and the disallowance was sustained.

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Issues: Whether a Real Estate Investment Trust, constituted as a trust and registered under the SEBI REIT Regulations, is entitled to deduction under section 35D of the Income-tax Act, 1961, in respect of expenditure incurred for public subscription, initial public offer, and listing of its units, and whether the company-specific language in section 35D(2)(c) can be extended to such a trust.

Analysis: Section 35D allows amortisation of preliminary expenses, but clause (c) specifically confines the deduction for expenditure connected with public subscription, underwriting commission, brokerage, and prospectus-related charges to a case where the assessee is a company. The assessee was held to be a business trust and not a company within the meaning of the Act, and the statutory scheme treating REITs as a distinct fiscal category under the pass-through regime reinforced that distinction. The plea for a liberal or harmonious construction was rejected because the clear words of the provision could not be expanded by interpretation to include units of a trust or to substitute them for shares or debentures of a company. The doctrine of substance over form was also found inapplicable in the face of an express legislative limitation.

Conclusion: The deduction under section 35D(2)(c) was not allowable to the assessee REIT and the disallowance was sustained.

Final Conclusion: The appeal failed on the sole substantive issue and the revenue authorities' view was affirmed.

Ratio Decidendi: Where a deduction provision expressly restricts a benefit to a company, the benefit cannot be extended by interpretation to a trust or other non-corporate assessee on grounds of similarity in economic function or regulatory treatment.

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