S. 35D covers only expenditure which are specifically mentioned therein & nothing beyond

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HIGH COURT OF MADRAS

Commissioner of Income-tax

v.

Ashok Leyland Ltd.

TAX CASE (APPEAL) NOS. 1253, 1254

AND 1256 OF 2005

JUNE 20, 2012

Expenditure incurred in connection with the issue of shares and debentures of the company to public subscription, which qualify for consideration under Section 35D, are underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus and nothing more. There is a residual clause to sub clause D, which shows such other items of expenditure not being expenditure eligible for any allowance or deduction under any other provisions of the Act as may be prescribed. Thus, other than what is contemplated under Sub Clause D, if there are still other expenditure in connection with the commencement of business or in connection with the expansion of the industrial undertaking after the commencement of the business or in connection with the set up of a new industrial unit, the same would also qualify for amortisation under Section 35D. In the light of the above discussion, we hold that the rates of expenditure which would go for amortisation under Section 35D, particularly with reference to sub clause (c)(iv) of sub section (2) of Section 35D, would be only those expenditure which are specifically mentioned therein and nothing beyond.