Which cases are most cited on preliminary expenses?

Kesoram Industries & Cotton Mills Ltd. v. CIT (196 ITR 845) — 61 citing judgments; CIT v. Priya Village Roadshows Ltd. (332 ITR 594) — 52 citing judgments; CIT v. Shree Synthetics Ltd. (162 ITR 819) — 39 citing judgments; CIT v. Multi Metals Ltd. (188 ITR 151) — 17 citing judgments; Berger Paints India Ltd. v. Commissioner of Income- Tax, Delhi-V (393 ITR 113) — 15 citing judgments.

How many judgments discuss preliminary expenses?

BharatTax indexes 132 ITAT, High Court and Supreme Court judgments that discuss preliminary expenses (Section 35D).

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“preliminary expenses”

Business ExpensesSection 35DSection 35D132 judgments

The decision most relied on for preliminary expenses is Kesoram Industries & Cotton Mills Ltd. v. CIT (196 ITR 845), cited in 61 judgments on BharatTax.

Leading authorities on preliminary expenses

Kesoram Industries & Cotton Mills Ltd. v. CIT

196 ITR 845 · 1992 · High Court

citing judgments

Expenditure incurred for exploring the feasibility of expanding or extending an existing business by setting up a new unit in the same line of business is revenue expenditure, not capital expenditure. Such expenditure, including obtaining project reports or legal opinions on desirability or feasibility, does not constitute the setting up of a new business.

CIT v. Priya Village Roadshows Ltd.

332 ITR 594 · 2011 · High Court

citing judgments

Expenditure incurred for starting a new business is capital in nature, irrespective of whether the project materializes. The essential purpose for which an expenditure is incurred determines its character as capital or revenue under Section 37(1).

CIT v. Shree Synthetics Ltd.

162 ITR 819 · 1986 · High Court

citing judgments

Expenses incurred in connection with a public issue of shares or debentures are allowable as revenue expenditure eligible for deduction under section 35D of the Income-tax Act. This includes expenses related to Qualified Institutional Buyers (QIBs).

CIT v. Multi Metals Ltd.

188 ITR 151 · 1991 · High Court

citing judgments

Expenditure incurred in connection with the extension of an undertaking or setting up a new unit by an Indian company is eligible for deduction under section 35D of the Income-tax Act.

Berger Paints India Ltd. v. Commissioner of Income- Tax, Delhi-V

393 ITR 113 · 2017 · Supreme Court

citing judgments

Premiums collected on share capital are not to be construed for the purpose of Section 35D(3)(b) of the Income Tax Act.

City Union Bank Ltd. v. CIT

118 Taxmann.com 96 · 2020 · High Court

citing judgments

Amounts held in a stale draft account cannot be treated as income of the assessee.

Judgments citing preliminary expenses

Dakshin Damodar Cold Storage Private Limited, Bankura More vs. ACIT Cir-1 Burdwan, Court Compound

In the result, the appeal of the assessee is allowed

ITA 436/KOL/2025[2013-14]Status: DisposedITAT Kolkata17 Feb 2026AY 2013-14

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri Soumitra Choudhury, ARFor Respondent: Shri Santanu Ghosh, DR

Section 194CSection 37(1)Section 40aSection 80G

issue raised in ground no.4 is against the confirmation of disallowance of %7,06,335/- as made by the Id. AO in respect of preliminary expenses. The Id. AO during the course of assessment proceedings noted that the assessee has shown other expenses in the profit and loss account which ... included the preliminary expenses of %7,06,335/- and accordingly, the details were called for by the assessee. However, the assessee has not file any details for the year resulting into addition of the same to the income of the assessee in the assessment framed. 5.1. In the appellate proceedings

Noida Towers Private Limited, New Delhi vs. DCIT, Circle-16(1), Delhi

ITA 4199/DEL/2024[2020-21]Status: DisposedITAT Delhi16 Jan 2026AY 2020-21

Bench: Ms. Madhumita Roy & Shri Manish Agarwal

Section 115BSection 139(1)Section 143(3)Section 144C(1)Section 144C(13)Section 153Section 92C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI MANISH

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 2037/KOL/2019[2015-16]Status: DisposedITAT Kolkata12 Jan 2026AY 2015-16

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

assessee pertaining to a particular item as revenue expenditure. Since there is a specific provision under section 35D for amortization of certain preliminary expenses which was applicable on the facts of the case, the recourse could not have been had to the residuary provision of section

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1248/KOL/2019[2014-15]Status: DisposedITAT Kolkata12 Jan 2026AY 2014-15

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1247/KOL/2019[2013-14]Status: DisposedITAT Kolkata12 Jan 2026AY 2013-14

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1246/KOL/2019[2012-13]Status: DisposedITAT Kolkata12 Jan 2026AY 2012-13

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

Deputy Commissioner of Income Tax, Kolkata vs. Phpl Properties Pvt. Ltd., Kolkata

ITA 1714/KOL/2024[2013-14]Status: DisposedITAT Kolkata09 Dec 2025AY 2013-14

Bench: Sri Pradip Kumar Choubey & Sri Rakesh Mishra

Section 132(1)Section 133(6)Section 133ASection 139Section 143(2)Section 153ASection 250Section 3Section 68

entry operators was also added and the sum was treated as commission paid out of unaccounted income. Another sum of ₹4,100/- towards preliminary expenses written off was added back to the income of the assessee which was related to the issue of raising of share capital and the total

DCIT., Circle-1(1), Hyderabad vs. Archeesh Health Care Private Limited, K V Ranga Reddy

In the result, the appeal filed by the Revenue is dismissed

ITA 124/HYD/2025[2018-19]Status: DisposedITAT Hyderabad14 Nov 2025AY 2018-19

Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 250Section 35DSection 37

आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ

ACIT, Central Circle-2(2), Hyderabad vs. Rithwik Projects Private Limited, Hyderabad

In the result, the appeal filed by the Revenue is dismissed

ITA 518/HYD/2022[2019-20]Status: DisposedITAT Hyderabad31 Oct 2025AY 2019-20

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, P Murali Mohan RaoFor Respondent: Shri Madan Mohan Meena (in

Section 132Section 142(1)Section 143(2)Section 35DSection 37(1)

current year. In this behalf, the Learned Sr. AR submitted that, as per the provisions of sec.35(D) of the Act, amortization of preliminary expenses are pertains to before the commencement of the business and as per provisions of sec.35D(1)(i) and 35D(i)(ii) any expenditure incurred after

Hyderabad Yadgiri Tollway Private Limited, Ahmedabad vs. The Pr.CIT-1, Ahmedabad

The appeal of the assessee is dismissed

ITA 1332/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Oct 2025AY 2018-19

Bench: Ms. Suchitra Kamble & Shri Narendra Prasad Sinhaassessment Year: 2018-19

Section 143Section 143(3)Section 263Section 43A

Profit on Sale of Asset 1,38,884 Self-Explanatory 4 Preliminary Expenses written off 5,046 nature 5 Payment towards Provident Fund and 1,66,379 Claimed in terms ESIC deposited before the due date of of Supreme filing Return of Income u/s.139(1) of Court the Act. Judgement

DCIT 42 1 1 Mumbai, Mumbai vs. Devleela Developers, Mumbai

In the result present appeal of the assessee stands allowed

ITA 2097/MUM/2025[2016-17]Status: DisposedITAT Mumbai30 Oct 2025AY 2016-17

Bench: Hon’Ble Shri Sandeep Gosain & Shri Girish Agrawaldcit – 42(1)(1) Vs. Devleela Developers Room No. 732, Kautilya 604-605, Aravalli Bhavan Bkc (E), Mumbai – Business Centre, 400051. Ramdas Sutrale Marg, Borivali (W) Pan/Gir No. Aacfd5181B (Applicant) (Respondent)

Section 142(1)Section 250

purchases opening stock Rs. 1,44,16,204/- and incurred direct expenses Rs.11,88,01,237/ which included IOD expenses, Ashra Preliminary Expenses, TDR Expenses and Compensation to Tenants, Corpus paid. On the income side the assessee had shown Rs. 10,48,09,000/- as sales and closing stock

Slr Infrastructure Private Limited, Hyderabad vs. DCIT., Circle-3(1), Hyderabad

In the result, the appeal filed by the assessee is allowed

ITA 544/HYD/2024[2018-19]Status: DisposedITAT Hyderabad17 Oct 2025AY 2018-19

Section 142(1)Section 143Section 143(3)Section 194CSection 263

which consist of three items. i.e, amortization of intangible asset u/s 37(1) and Circular 9/2014 issued by CBDT for Rs.73.93 crores, amortisaiton of preliminary expenses u/s 35D of the Act for Rs.24.93 lakhs and adjustment towards grant income disclosed in the books allowable under the Act for Rs.11.16 crores

Rivaara Labs Private Limited, Mumbai vs. Principal Commissioner of Income Tax -3, Mumbai

In the result, the appeal of the assessee is allowed

ITA 3640/MUM/2025[2021-22]Status: DisposedITAT Mumbai14 Oct 2025AY 2021-22

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: Shri Nishit Gandhi,ARFor Respondent: Shri Uma Shankar Prasad, (CIT-DR)

Section 143(3)Section 263Section 35DSection 37Section 37(1)

retainership fees of INR 52,84,362/- under section 37(1) of the Act, by treating the expenditure as preliminary expenses under section 35D of the Act and amortising the claim of deduction over a period of 5 years. 11. In failing to appreciate that section 35D applies only ... Retainership fees of 52,84,362/-claimed deductible u/s 37 of the Act observing that these expenses should be considered as preliminary expenses under section 35D of the Act and ought to be amortised over a period of 5 years. After calling for response from the assessee, he passed order

Narayan Suppliers Pvt. Ltd., Kolkata vs. I.T.O., Ward - 6(3), Kolkata

In the result, appeal of the assessee is dismissed

ITA 1077/KOL/2024[2011-2012]Status: DisposedITAT Kolkata08 Sept 2025AY 2011-2012

Bench: Shri George Mathan & Shri Rakesh Mishra

For Appellant: Shri Avijit Ghoshal, ARFor Respondent: Shri Raja Sengputa, CIT-DR

Section 10(38)

EXPENDITURE Accounting Charges Office Expenses Bank Charges Share Trading loss Bank interes Audit Fees Legal Charges Preliminary Expenses w/off Filling Fees De-mat Charges Printing & Stationary Stt charges Internal Audit fee TOTAL ... LIABILITIES & PROVISIONS Current Liabilities & Provisions 6 2,000.00 191,010.23 38,705.00 109,864.18 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) Preliminary Expenses Profit & Loss Alc TOTAL - 7 14954.00 51577.25 71,700,000.00 22,432.00 40,989.21 71,700,000.28 Notes on Accounts The Schedules annexed

ACIT, Circle-3(2), New Delhi vs. Asian Consolidated Inds.Ltd), Rewari

In the result, all the 03 appeals filed by the Revenue stand dismissed in the aforesaid manner

ITA 7501/DEL/2018[1995-96]Status: DisposedITAT Delhi27 Aug 2025AY 1995-96

Bench: Shri Anubhav Sharma & Shri Krinwant Sahay, Accoutant Member Ita No. 6218/Del/2017 (Asstt. Year 1994-95) & Dcit, Circle-3(2), New Delhi Vs. M/S Asian Consolidated Industries Ltd., 96Th Mile Stone, Delhi-Jaipur Highway, Village-Bawal, Distt.- Rewari, Haryana (Pan: Aaaca5887A) (Appellant) (Respondent) Assessee By : Sh. Ved Jain, Adv. & Sh. Ayush Garg, Ca Department By : Ms. Monika Singh, Cit-Dr Date Of Hearing 20.08.2025 Date Of Pronouncement 27.08.2025 Order Per Krinwant Sahay, Am:

For Appellant: Sh. Ved Jain, Adv. & Sh. Ayush Garg, CAFor Respondent: Ms. Monika Singh, CIT-DR

Section 264

1/10th of such expenditure in accordance with the provisions of Section 35D(1) of the Act, which are also reproduced hereunder: “Amortisation of certain preliminary expenses. 13 35D. (1) Where an assessee, being an Indian company or a person (other than a company who is resident in India, incurs, after ... unit commences production or operation" 32. It is evident from the extract of the Section 35D(1), that the claim for preliminary expenses is allowed over a period of 10 years. Therefore, CIT(A) has rightly allowed 1/10th of the expenditure in the relevant previous year, and consequently the ground

DCIT, Circle-3(2), New Delhi vs. Asian Consolidated Inds.Ltd), Rewari

In the result, all the 03 appeals filed by the Revenue stand dismissed in the aforesaid manner

ITA 4514/DEL/2018[1993-94]Status: DisposedITAT Delhi27 Aug 2025AY 1993-94

For Appellant: Sh. Ved Jain, Adv. & Sh. Ayush Garg, CAFor Respondent: Ms. Monika Singh, CIT-DR

Section 264

DCIT, Circle-3(2), New Delhi vs. Asian Consolidated Inds.Ltd), Rewari

In the result, all the 03 appeals filed by the Revenue stand dismissed in the aforesaid manner

ITA 6218/DEL/2017[1994-95]Status: DisposedITAT Delhi27 Aug 2025AY 1994-95

For Appellant: Sh. Ved Jain, Adv. & Sh. Ayush Garg, CAFor Respondent: Ms. Monika Singh, CIT-DR

Section 264

Jivansudha Vincom Pvt. Ltd., Kolkata vs. ITO Ward 6(2), Kolkata

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2322/KOL/2024[2011-12]Status: DisposedITAT Kolkata11 Aug 2025AY 2011-12

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 131Section 133(6)Section 142(1)Section 143(1)Section 143(3)Section 14ASection 68

account of unexplained cash credit made by the AO. Besides this the AO has also made the following addition/ disallowance: i) Disallowance of preliminary Expenses Rs. 16,320/- ii) Disallowance u/s 14A of the Act Rs. 8,67,250/- 3. Aggrieved by the said order, the assessee preferred an appeal

ACIT, Cir-1(1), Rajkot vs. Shri Rajkot District Co Operative Bank Ltd, Rajkot

The appeal of the revenue is dismissed

ITA 188/RJT/2024[2015-16]Status: DisposedITAT Rajkot05 Aug 2025AY 2015-16

Bench: Dr. Arjun Lal Saini. & Shri Dinesh Mohan Sinhaआयकरअपीलसं./Ita No.188/Rjt/2024 िनधा"रणवष"/ Assessment Year: (2015-16) (Hybrid Hearing) Assistant Commissioner Of Income- Vs. Rajkot District Co-Operative Bank Tax, Circle-1 (1), Rajkot Limited Room No.502, Aayakar Bhawan, Jilla Bankbhavan, Kasturba Road, Race Course Ring Road, Rajkot- Opp: Chaudhary High School, 360001 Rajkot 360001 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaaar0564K (Appellant) (Respondent) Appellant By : Shri D. M. Rindani, Ld. Ar Respondent By : Shri Abhimanyu Singh Yadav, Ld.Sr.Dr : 09/06 /2025 Date Of Hearing Date Of Pronouncement : 05/08 /2025

For Appellant: Shri D. M. Rindani, Ld. ARFor Respondent: Shri Abhimanyu Singh Yadav, Ld.Sr.DR

Section 143(3)Section 36(1)Section 36(1)(viii)

assessee has drawn out attention to following judgement: (a) DCIT vs GNFC Ltd. (2014) 42 taxmann.com 438 (Gujarat); “Where assessee's claim for preliminary expenses had been allowed in earlier years, in absence of any change in circumstances, following principle of consistency, said claim was to be allowed in relevant

M.S. Khurana Engineering Limited, Ahmedabad vs. The DCIT, Circle-2(1)(2), Ahmedabad

ITA 2171/AHD/2018[2014-15]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

For Appellant: Shri Deepak Rindani, ARFor Respondent: Shri R.P. Rastogi, CIT-DR &

Section 14ASection 80Section 80I

Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in confirming the disallowance made by the Assessing Officer of Rs.13,40,328/- by way of preliminary expenses. 4. The Learned Commissioner of Income Tax (Appeals) - VIII, Ahmedabad erred in upholding the disallowance made by the Assessing Officer of Rs.17 ... agitated against the action of the CIT(A) in confirming the disallowance made by the AO of Rs.13,40,328/- in respect of preliminary expenses claimed by the assessee on issue of shares for raising capital u/s.35D of the Act. 5. The Lower authorities disallowed the said expenditure observing that