Section 35D(2)(c)

Section 35D(2)(c) — the law in short

What the courts have decided on section 35D(2)(c), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Embassy Office Parks REIT v DCIT — a REIT cannot amortise its IPO expenses under section 35D(2)(c) because it is not a company ITATHelps departmentValidity unconfirmed
  Our REIT incurred large expenses on its initial public offer and listing. Can it write them off over ten years under section 35D like a listed company?
  No, on the Bangalore Tribunal's reasoning. Clause (c) of section 35D(2) opens with the words 'where the assessee is a company', and a SEBI-registered Real Estate Investment Trust constituted under the Indian Trusts Act 1882 is neither a company under the Companies Act 2013 nor a company within section 2(17) of the Income-tax Act, so the deduction is unavailable however closely the public issue of units resembles a public issue of shares. The Tribunal held those opening words to be a conscious legislative limitation and not surplusage, refused to read units as shares, and dismissed the appeal.
• Adani Power Ltd v Dy CIT ITATCuts both waysValidity unconfirmed
  The AO has thrown out most of my IPO expenses because they are not named in s.35D(2). Is that list closed?
  It depends, and the burden is yours. The Tribunal accepted that the word 'being' in s.35D(2) makes the list inclusive, so there is room to argue for an item not spelled out. But it held the scope is not unrestricted and the assessee must prove each item is directly or indirectly connected with the issue of shares - vehicle hire, travel consultant fees, foreign travel and filing fees had gone through two authorities without that evidence. The order does not give one answer: for assessment year 2010-11 the claim went back to the Assessing Officer for verification, while for 2011-12 the identical ground was dismissed. The one part of the claim that survived on the merits was the amount the Commissioner (Appeals) had specifically tied to the share issue, which the Department failed to have restored.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.