Dismissing the appeal the Court held that the Tribunal was right in holding that the share premium collected on the issue of share capital by the assessee could not be taken as part of the capital employed for allowing deduction under section 35D. Followed Berger Paints India Ltd. v. CIT (2017) 393 ITR 113 (SC). Court also held that there is a vast difference between expansion and extension. The Tribunal was right in law in holding that the cost of acquisition of companies could not be treated as asset for allowing deduction under section 35D. (AY.2008-09)
Subex Ltd. v. CIT (2021) 439 ITR 495 / 2022) 285 Taxman 350 (Karn.)(HC)
S. 35D : Amortisation of preliminary expenses-Share premium expenses-Not part of capital employed-Cost of acquisition does not constitute cost of project-cost of acquisition of companies could not be treated as asset for allowing deduction under section 35D.