The Assessee had undergone amalgamation by order of the Calcutta High Court dated 26.10.2006 and the Bombay High Court dated 01.12.2006, which was to be effective from 01.04.2005. The Assessee claimed 2/5th of the expenses incurred during the present AY 2007-08 u/s 35DD in the computation of income by stating that since the Assessee could not claim the deduction in AY 2006-07, the Assessee has claimed 2/5th i.e. 1/5th for A.Y. 2006-07 & 2/5th A.Y.2007-08. The ITAT observed that section 35DD is unambiguous and there is no provision u/s 35DD to claim 2/5th of the expenditure incurred towards amalgamation / demerger. The Assessee had also raised an additional ground to treat AY 2007-08 as the first year from which the merger expenses are claimed u/s 35DD and allow the Assessee to claim the expenses in next 4 AYs subsequent to AY 2007-08. The ITAT found merit in this contention and allowed the same. (AY. 2007-08)
United Spirits Ltd. v. Jt. CIT [2024] 109 ITR 37 (SN) (Mum)(Trib)
S. 35DD: Amortisation of expenditure -Amalgamation -merger expenses -whether the year in which the High Court order was received can be treated as the 1st year from which the merger expenses can be claimed u/s 35DD and allow to claim the said expenses in next 4 AYs -Held yes.