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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

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

ITA 2170/AHD/2018[2013-14]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2013-14

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

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

ITA 2169/AHD/2018[2012-13]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2012-13

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

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

ITA 2168/AHD/2018[2011-12]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2011-12

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

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

Section 14ASection 80Section 801A(4)Section 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

M.S. Khurana Engineering Limited, Ahmedabad vs. The Dy. CIT, (OSD)-1, Circle-4, Ahmedabad

ITA 659/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2011-12

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

M.S. Khurana Engineering Limited, Ahmedabad vs. The Dy. CIT, (OSD)-1, Circle-4, Ahmedabad

ITA 658/AHD/2016[2010-11]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2010-11

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

M.S. Khurana Engineering Limited, Ahmedabad vs. The Jt. CIT, Range-4, Ahmedabad

ITA 1608/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad31 Jul 2025AY 2009-10

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

Jaypee Fertilizers & Industries Ltd., Noida vs. Pr.CIT, Noida

Appeal is dismissed

ITA 1047/DEL/2022[2017-18]Status: DisposedITAT Delhi30 Jul 2025AY 2017-18

Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Section 143(3)Section 263Section 35D

paper-book along with his reply dated 02.08.2019 is to claim “any other amount allowable as deduction” under section 35D including preliminary expenses, upfront fee and 8 | P a g e professional and technical fee involving varying sums whose verification never saw light of the day. We conclude in this

M/S. Green Earth Biogas Pvt. Ltd., Surendranagar vs. The Pr. CIT-3, Ahmedabad

ITA 185/RJT/2023[2017-18]Status: DisposedITAT Rajkot17 Jul 2025AY 2017-18

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपीलसं./Ita No.185/Rjt/2023

For Appellant: Shri Hardik Vora, Ld. A.RFor Respondent: Shri Sanjay Pungalia, Ld. Sr. DR

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN

DCIT-2(3)(1), Mumbai vs. Indusind Bank Ltd., Mumbai

In the result, the Income Tax Appeal is

ITA 3675/MUM/2023[2018-19]Status: DisposedITAT Mumbai17 Jul 2025AY 2018-19

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Kalpexh Unadkat &For Respondent: Shri Satya Pal Kumar, CIT-DR

Section 143(3)Section 14ASection 250Section 35DSection 36(1)(via)Section 36(1)(viia)Section 43B

said amount i.e. Rs. 10,21,58,858/- during the year under consideration under section 35D(2)(c)(iv) which allow amortization of preliminary expenses incurred in connection with the issue for "Public Subscription" of shares. The AO disallowed the said claim on the ground that ... order of the CIT(A). 28. The ld. DR submitted that the deduction under section 35D(2)(c)(iv) allows amortization of certain preliminary expenses including those incurred in connection with the issue for public subscription of shares towards underwriting commission, brokerage and charges for drafting, typing, printing, advertising

Indusind Bank Ltd, Mumbai vs. The DCIT-2(3)(1), Mumbai

In the result, the Income Tax Appeal is

ITA 1842/MUM/2023[2019-20]Status: DisposedITAT Mumbai17 Jul 2025AY 2019-20

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

Section 143(3)Section 14ASection 250Section 35DSection 36(1)(via)Section 36(1)(viia)Section 43B

said amount i.e. Rs. 10,21,58,858/- during the year under consideration under section 35D(2)(c)(iv) which allow amortization of preliminary expenses incurred in connection with the issue for "Public Subscription" of shares. The AO disallowed the said claim on the ground that ... order of the CIT(A). 28. The ld. DR submitted that the deduction under section 35D(2)(c)(iv) allows amortization of certain preliminary expenses including those incurred in connection with the issue for public subscription of shares towards underwriting commission, brokerage and charges for drafting, typing, printing, advertising

India Global Chamber of Businesses, New Delhi vs. CIT(Exemption), New Delhi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1061/DEL/2024[2024-25]Status: DisposedITAT Delhi09 Jul 2025AY 2024-25

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

For Appellant: Shri Saif Ali, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR

Section 80GSection 80G(5)Section 80G(5)(iii)

financials for FY 2022-23, he noticed that assessee has debited expenses of Rs.3,828/- and the same pertains to audit fees, preliminary expenses and ROC fees. Further, on perusal of financials of FY 2021-22, he noticed that assessee debited an expenses of Rs.83,028/- and the same pertains ... audit fees, preliminary expenses and ROC fees. Therefore, he observed that from the above, it is evident that no charitable activity has been carried out by the assessee. He reproduced the financial statements in his order at pages 4 to 6. Therefore, he came to the conclusion that the assessee

Rogi Kalyan Samiti Chital, Chital Amreli vs. ITO Exemption Ward-2 Rajkot, Rajkot

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

ITA 328/RJT/2023[2013-14]Status: DisposedITAT Rajkot18 Jun 2025AY 2013-14

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No.328/Rjt/2023 Assessment Year: (2013-14) (Hybrid Hearing) Rogi Kalyan Samiti Chital, Income Tax Officer C. H. C. Chital, Chital District, Vs. (Exemption), Ward – 2, Rajkot Amreli-365 601 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aactr 0652 F (Appellant) (Respondent)

Section 10Section 11Section 12ASection 143(1)Section 154Section 234A

issued on 18-05-2013 - Thereafter, assessee filed revised return by considering amortization of toll modernization expenses and preliminary expenses written off, which were inadvertently omitted to be considered in original return. The AO refused to consider revised return by observing that same was filed after issuance of intimation

ACIT Central Circle 2 (2), Chennai vs. M/S Midas Golden Distilleries Private Limited, Kanchipuram

In the result, the appeal filed by the Revenue is partly allowed

ITA 2562/CHNY/2017[2004-05]Status: DisposedITAT Chennai25 Apr 2025AY 2004-05

Bench: Shri Ss Viswanethra Ravi & Shri Jagadishआयकर अपील सं./Ita No.2562/Chny/2017 िनधा:रण वष: /Assessment Year: 2004-05

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri A. Sasi Kumar, CIT

premises during the course of survey proceedings u/s. 133A of the IT Act. 5. The Id CIT(A) erred in deleting the disallowance of preliminary expenses of Rs.92,246/-for the reason that 1/5th of the same mandated u/s.35 of the IT Act was allowed in the subsequent year ... find no infirmity in the order of Ld. CIT(A) and accordingly, we uphold the same. 7. Ground No. is relating to disallowance of preliminary expenses of Rs. 92,246/- being 1/5th of the expenses claimed u/s. 35D of the Act. 7.1 The A.O has made the disallowance of preliminary

Shree Jeen Tradelink Pvt., Kolkata vs. DCIT, Central Cir.-3(3), Kolkata

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

ITA 2633/KOL/2024[2014-15]Status: DisposedITAT Kolkata24 Apr 2025AY 2014-15

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 2633/Kol/2024 Assessment Year: 2014-2015 Shree Jeen Tradelink Pvt. Limited,……..……Appellant 4Th Floor, 7/1A, Grant Lane, Bow Bazar, Kolkata-700012 [Pan:Aalcs6638J] -Vs.- Deputy Commissioner Of Income Tax,……...Respondent Central Circle-3(3), Kolkata, Aayakar Bhawan, Poorva, 110, Shanti Pally, Kolkata-700107 Appearances By: N O N E, Appeared On Behalf Of The Assessee Shri Akhil Saxena, Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: April 07, 2025 Date Of Pronouncing The Order: April 24, 2025 O R D E R

Section 132Section 133ASection 143(3)

Stationery Rs.10,898/-, Capital Incremental fees Rs.400/-, compliance certificate charges Rs.500/-, filing fees Rs.2,000/-, payment to auditor Rs.3,000/-, professional fees Rs.1,500/-, Preliminary expenses Rs.11,164/-. The assessee could not submit any explanation. Opportunity was given repeatedly but the assessee could not produce the books of account

M/S N.A.M. Expressway Limited, Delhi vs. ACIT., Circle-5(1), Hyderabad

In the result, appeal filed by the assessee is allowed

ITA 580/HYD/2024[2018-19]Status: DisposedITAT Hyderabad28 Jan 2025AY 2018-19

Bench: Shri Manjunatha G. & Shri K.Narasimha Charyआ.अपी.सं /Ita No.580/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2018-19) N.A.M.Expressway Ltd. Vs. Acit, Circle-5(1) Delhi Hyderabad [Pan : Aadcn3131D] (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri Salil Kapoor, Ms Ananya Kapoor & Shri Tarun Chanana, Ar (Through Virtual Mode) रधजस् व द्वधरध/Revenue By: Shri Shiva Sewak, Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 30/10/2024 घोर्णध की तधरीख/Date Of 28/01/2025 Pronouncement: आदेश / Order Per. Manjunatha G., A.M: This Appeal Filed By The Assessee Is Directed Against The Order Dated 20.03.2019 Of The Learned Principal Commissioner Of Income Tax [Ld.Pcit], Hyderabad-4 Pertaining To A.Y.2018-19 On The Following Grounds :

For Appellant: Shri Salil KapoorFor Respondent: Shri Shiva Sewak, CIT-DR

Section 143(3)Section 263Section 37(1)Section 43B

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

Deputy Commissioner of Income Tax, Kolkata vs. Bhawani Construction Pvt. Ltd., Howrah

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

ITA 1649/KOL/2024[2012-13]Status: DisposedITAT Kolkata17 Jan 2025AY 2012-13

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 143(2)Section 143(3)Section 2(24)(x)Section 264Section 36(1)(va)Section 68

share capital and share premium raised during the financial year 2011-12. The A.O. had also disallowed an expenditure of Rs. 50,000/- representing preliminary expenses (ROC filing fees) on the ground that the same constituted a capital expenditure. In addition thereto the A.O. made an addition

M/S. Bhikshu Polymers Pvt. Ltd. (Earlier Known As M/S. Jeevan Commotrade Pvt. Ltd.), Kolkata vs. I.T.O., Ward - 6(2), Kolkata

In the result, the appeal of the assessee is dismissed

ITA 1538/KOL/2024[2009-2010]Status: DisposedITAT Kolkata23 Dec 2024AY 2009-2010

Bench: SHRI SANJAY GARG, JUDICIAL MEMBER SHRI SANJAY AWASTHI (Accountant Member)

Section 143(3)Section 250Section 263Section 68

Fees 2,758 Bank Charges 574 Company Secretarial Fees 1000 Filing Fees 600 Professional Fees 750 General Expenses 1,939 Printing & Stationary 1,869 Preliminary Expenses 1,660 Total 11,150 Profit (+)/Loss(-) before tax 1,723 Less Provision for Taxation 531 Profit (+)/Loss(-) after tax carried to Balance Sheet

ACIT-CC-7(3), Mumbai vs. Dharmanath Buildtech and Farms Private Limited, Mumbai

ITA 5462/MUM/2024[2009-10]Status: DisposedITAT Mumbai04 Dec 2024AY 2009-10

Bench: Justice (Retd.) C V Bhadang, Hon'Ble & Shri B R Baskaran, Hon'Ble

Section 143(3)Section 147Section 148

office and administrative expenses of ₹11,56,919/- the assessee had claimed interest and finance charges of ₹5,39,83,358/- and after showing preliminary expenses written off of ₹3,825/- the net profit was shown as 63,330/-. During the scrutiny proceedings the assessee submitted its explanation vide letter

Dy. CIT Special Range-1, Lucknow vs. M/S Indo Gulf Fertilizers & Chemicalscoeporation Ltd, Sultanpur

In the result, the appeal of the Revenue is accordingly dismissed

ITA 1539/LKW/1996[1990-91]Status: DisposedITAT Lucknow27 Nov 2024AY 1990-91

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(3)Section 256(1)Section 32ASection 35D

passed by the ITAT in I.T.A. No.2382(Alld)/1992 dated 31/08/94 for assessment year 89-90. The Tribunal in this order dated 31/08/94 allowed preliminary expenses to be included for deduction u/s 35D but the Department has filed R.A. u/s 256(1) for assessment year 89-90 which is pending ... regarding assessee’s claim u/s 35D of the IT Act. The assessee claimed deduction amounting to Rs.55,06,132/- being 1/10th of the total preliminary expenses amounting to Rs.5,50,61,320/- for which details were furnished by the assessee to the Assessing Officer. The Assessing Officer held that

Aptiv Connection Systems India Private Limited, Kochi, Kerala vs. Assistant Commissioner of Income Tax, Circle 1(1) Kochi, Kochi, Kerala

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

ITA 641/COCH/2023[2005-06]Status: DisposedITAT Cochin11 Nov 2024AY 2005-06

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Salil Kapoor, AdvocateFor Respondent: Smt. Girly Albert, Sr. DR

Section 10ASection 154

without any adjustment or set off of any loss from any other source, either eligible or non-eligible (under section 10A) . The allocation of preliminary expenses under section 35D for the purpose could either on some reasonable basis, as turnover, or better still, set off against the specific income