PR. COMMISSIONER OF INCOME TAX-1 vs. M/S ANSAL PROPERTIES AND INFRASTRUCTURE LIMITED

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ITA - 185 / 2023HC Delhi27 March 20233 pages
For Petitioner: SANJAY KUMAR
AI SummaryAllowed

What did the High Court hold?

The Tribunal permitted the assessee to claim amortization of share issuance expenditure under Section 35D. It held that shares issued to QIBs could be treated as public subscription, relying on previous tribunal decisions.

What were the facts?

The assessee sought to amortize expenditure incurred in issuing shares. The Tribunal allowed the assessee to raise an alternate ground for amortization under Section 35D, considering shares issued to Qualified Institutional Buyers (QIBs) as public subscription.

What were the issues?

Whether expenditure incurred in issuing shares to QIBs is eligible for amortization under Section 35D, and if such issuance can be considered 'public subscription'.

Which sections of the Income-tax Act were involved?

Section 35D,Section 37

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$~59 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 185/2023 and CM APPL. 14928/2023

PR. COMMISSIONER OF INCOME TAX-1 ..... Appellant Through: Mr Sanjay Kumar, Sr. Standing Counsel with Ms Easha Kedian, Advocate.

versus

M/S ANSAL PROPERTIES AND INFRASTRUCTURE LIMITED

..... Respondent

Through: None.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

27.03.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This appeal concerns Assessment Year (AY) 2011-2012. 2. The challenge in the appeal is laid to the order dated 16.07.2021 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. 3. At the heart of the matter is the dispute concerning the correctness of the decision taken by the Tribunal in allowing the respondent/assessee to raise an alternate ground. Via the alternate plea/ground, the petitioner sought amortization of expenditure incurred in issuing shares amounting to Rs.9,46,22,358/- under Section 35D(2)(c)(iv) of the Income Tax Act, 1961 [in short, “the Act”].

ITA 185/2023

page 1 of 3

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:45

4.

The Tribunal permitted the respondent/assessee to take the alternate plea, while disagreeing with the respondent/assessee, that it could claim a deduction qua the aforementioned amount under Section 37 of the Act. The disagreement was based on the judgment rendered by the Supreme Court in Brook Bond India Ltd. v. CIT (1997) 225 ITR 798 (SC). 4.1 However, having regard to the fact, that the necessary ingredients for laying a claim made under Section 35D of the Act were available on record, the Court after applying the judgment of the Supreme Court in Shasun Chemicals & Drugs Ltd. v. CIT (2016) 388 ITR 1 (SC) allowed the amortization claim 5. Mr Sanjay Kumar, senior standing counsel, who appears on behalf of the appellant/revenue, says that one of the aspects, that had to be deliberated upon, was whether shares issued to Qualified Institutional Buyers (QIBs) can be treated as “public subscription”. 6. We find, upon perusing the impugned order, that the Tribunal has taken the view, that the shares issued to QIBs could be treated as public subscription. 6.1 In reaching this conclusion, the Tribunal has relied upon the judgment rendered by the coordinate benches situate at Mumbai and Hyderabad, in the matter of Yes Bank Ltd. v. Dy. CIT (2020) 117 taxman.com 974 (Mumbai- Trib.) and DCIT v. Deccan Chronicle Holdings Ltd. (2015) 60 taxmann.com 240 (Hyd-Trib.). 7. It appears, that no appeal has been preferred by the appellant/revenue, concerning these decisions rendered by the Tribunal.

ITA 185/2023

page 2 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:45

7.1 Mr Kumar will return with definitive instructions, as to whether any appeal has been filed, and if not, the reason for not instituting the appeal. 8. Furthermore, Mr Kumar will place on record, the SCRA guidelines on QIBs. 9. List the appeal on 24.04.2023.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

MARCH 27, 2023 / tr

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ITA 185/2023

page 3 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:24:45

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