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2015 (5) TMI 227 - CALCUTTA HIGH COURT

2015 (5) TMI 227 - CALCUTTA HIGH COURT - TMI - Qualifying amount for deduction u/s.35D - whether the quantum of deduction admissible under the section for a period of ten successive years at the rate of 1/10th of the expenditure having been fixed and become final in the initial year, the amount of such deduction can be varied in any subsequent year? - Held that:- The amount deductible under sub-section 1 of Section 35D is subject to the provisions contained in Sub-section 3 of Section 35D. The p .....

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mination is demonstrably wrong. But res judicata in this branch of law is bound to yield to two fundamental principles of public law: that jurisdiction cannot be exceeded; and that statutory powers and duties cannot be fettered. The jurisdiction of the CIT (A) in its order dated 29th May, 1998 extended merely to the assessment year 1995-96. The assessment year 1996-97 is a separate unit and that assessment cannot be made otherwise than in accordance with law. - Decided in favour of the revenue - .....

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ows. The assessee claims to have incurred an expenditure of a sum of ₹ 87,20,000/- on account of share issue expenses during the assessment year 1994-95. The assessee claimed deduction of the aforesaid sum of ₹ 87,20,000/- at the rate of 10% under section 35D. The assessment for the aforesaid year was completed under section 143(1) and therefore, there was no scrutiny and the expenditure claimed was allowed. In the assessment year 1995-96 an identical claim was repeated and disallowe .....

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expenditure. Therefore, he is entitled to such deduction U/s.35D. The case of Brooke Bond India is not applicable to that of the appellant. A.O. is not justified in treating ₹ 8.72 lacs as capital expenditure. The addition in this regard is deleted." The CIT (Appeal) in its aforesaid order dated 29th May, 1998, however, missed out sub-section 3 of section 35D. The department also appears to have been oblivious about the same. The assessee repeated its claim for deduction of a sum of .....

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peal which was allowed by holding, inter alia, as follows:- "We find that the assessee is entitled for deduction of share issue expenses u/s.35D at the rate of 1/10th of the expenses for 10 successive assessment years. However, the total amount of deduction allowable shall be restricted to 2.5% of the capital employed. In the present case, the A.O. has held that because of this restriction of 2.5% prescribed in the section itself, qualifying amount for deduction in the year under appeal com .....

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