Held, allowing the appeal, that once the claim had been allowed in the-initial AY., the claim could not be denied in the subsequent-AY.s on identical facts. Since the expenditure incurred by the-assessee towards fees paid to the Registrar of Companies in the AY. 2007-08 had been considered as preliminary expenses and one-fifth of it had been allowed under section 35D of the Act, the balance had to be allowed in the subsequent four assessment years.(AY. 2009-10)
Vatika Hotels P. Ltd. v. Asst. CIT (2023)101 ITR 21 / 199 ITD 741(Delhi) (Trib)
S. 35D : Amortisation of preliminary expenses-Business expenditure-Payment to registrar of companies towards fees considered as preliminary expenses and 1/5th allowed in initial years-Cannot be disallowed in subsequent years.[S. 37(1)]