Section 35DD(1) — the law in short
What the courts have decided on section 35DD(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Coforge Ltd (formerly NIIT Technologies Ltd) v ACIT
High CourtHelps taxpayerNo later treatment found
My company is the resulting company in a demerger and it bore the legal and professional costs of the scheme. The Assessing Officer says only the demerged company can claim s.35DD. Is he right?
No, at least where the resulting company was already in existence. The Delhi High Court held that the word 'assessee' in s.35DD(1) is not confined to the demerged company; the legislature used it having regard to the various ways demerger schemes are structured. It also held that where the one-fifth deduction was allowed in the earlier years of the block, it should not have been disallowed in later years on reasoning that does not comport with a plain reading of the section.
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.
