2015 (5) TMI 227

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Respondent : Mr S N Dutta, Adv. ORDER The Court : The subject matter of challenge in this appeal is a judgement and order dated 28th January, 2005 passed by the learned Income Tax Appellate Tribunal pertaining to the assessment year 1996-97. Briefly stated the facts and circumstances of the case are as follows. The assessee claims to have incurred an expenditure of a sum of Rs. 87,20,000/....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e are incurred for the purpose of public issue, it can be amortised U/s.35D. Appellant has claimed I/10th of such expenditure. Therefore, he is entitled to such deduction U/s.35D. The case of Brooke Bond India is not applicable to that of the appellant. A.O. is not justified in treating Rs. 8.72 lacs as capital expenditure. The addition in this regard is deleted." The CIT (Appeal) in its afores....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....led for deduction of share issue expenses u/s.35D at the rate of 1/10th of the expenses for 10 successive assessment years. However, the total amount of deduction allowable shall be restricted to 2.5% of the capital employed. In the present case, the A.O. has held that because of this restriction of 2.5% prescribed in the section itself, qualifying amount for deduction in the year under appeal com....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...." The amount deductible under sub-section 1 of Section 35D is subject to the provisions contained in Sub-section 3 of Section 35D. The provision contained in Sub-section 3 provide an outer limit. Therefore, there can be no dispute nor has Mr. Khaitan, learned Senior Advocate disputed that deduction under Section 35D cannot be in excess of the provision contained in Sub-section 3 which is 2.5% o....