Case Law Details
Dhanalakshmi Bank Ltd. Vs CIT (Kerala High Court)
Conclusion: Deduction under section 35D for amortisation of preliminary expenses in connection with the issue of shares for public subscription was allowable to assessee bank extending financial services.
Held: AO denied deduction under section 35D on the ground that assessee was a bank extending financial services and not an industrial undertaking therefore, it would not be entitled to amortisation of preliminary expenses in connection with the issue of shares for public subscription. It was held the manner in which the “industrial undertaking” had been dealt with by the various High Courts in the context of the IT Act was to be looked into. Following the decision in case of Alikunju, M.A.Nazeer Cashew Industries v. C.I.T. [(1987) 166 ITR 804 (Ker)] wherein it was concluded that the words “industrial undertaking” therefore, should be understood to have been used in section 54D in a wide sense, taking in its fold any project or business a person may undertake. The “running of a lodge”, by assessee, could be said to be an “industrial undertaking” within the meaning of section 54D of the Income-tax Act”. Thus, assessee was eligible for the claim under Section 35D.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
The issues arising in the above appeals for the assessment years 1996-97 to 2006-07 are, in certain of the years, common. There are also more than one appeal filed in two years, i.e., in 1996-97 and 2006-07 two appeals each. In 1996-97, the two appeals [I.T.A.Nos.456 & 643 of 2009] arise; one from the order of assessment under Section 143(3) of the Income Tax Act, 1961 [for brevity “the Act”] and the other from an assessment carried out under Section 143 read with Section 263 of the Act. In the year 2006-07, there are two appeals [I.T.A.Nos.126 & 116 of 2012]; one from the order of the Tribunal rejecting the appeal of the Department and the other from the order of the Tribunal allowing the appeal of the assessee.
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