Section 35DDA of the Income Tax Act
Income-tax Act, 2025: s.52
Section 35DDA of the Income-tax Act, 1961 corresponds to section 52 (Amortisation of expenditure for telecommunications services, amalgamation, demerger, scheme of voluntary retirement, etc) of the Income-tax Act, 2025.
Read section 52 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 35DDA is ICDS Ltd. v. CIT (350 ITR 527), cited in 280 of the 107 judgments on BharatTax that turn on this section.
Leading authorities on Section 35DDA
An assessee engaged in the business of hire purchase or leasing, being the lessor, is entitled to claim depreciation on assets leased out, even if the assets are registered in the name of the lessee and used by the lessee.
The object clause in a partnership deed is not determinative of the head under which rental income is to be assessed; income from letting out shops and stalls developed by the assessee may still be classified as 'Income from House Property' rather than 'Profits and Gains of Business'.
Income earned during the construction phase of a project, which has a direct and inextricable nexus with the project's setting up, constitutes a capital receipt and reduces the project's cost, rather than being taxable as revenue income. This applies to incidental income like interest on funds (e.g., share capital, grants) temporarily parked before being utilized for the specific project.
A building used as a nursing home qualifies as 'plant' under the Income-tax Act if it functions as a tool of the trade with which the business is carried on, as determined by the functional test.
ESOP cross-charge expenses are allowable as a deduction under Section 37 of the Income Tax Act. The difference between the fair market value of shares and the price at which they are issued to employees of an Indian associated enterprise constitutes an ascertained liability that is revenue in character.
Lump sum payments for lease, even for an extended period, can be considered revenue expenditure if they substitute for revenue expenditure. Payments that substitute for revenue expenditure are generally treated as revenue expenditure.
The Supreme Court refers the issue of whether a shareholder must be both registered and beneficial for reconsideration by a larger bench.
The refund of guarantee commission for the unexpired period of a guarantee contract, where the contract is revoked prematurely, is a valid deduction for the assessee-bank.
Rental income from a property is taxable as 'income from house property' rather than 'business income' unless the assessee engages in recurrent, organized, and systematic business activity related to the letting out and maintenance of the premises.
A tax cannot be levied until any ambiguity or defect in the law is removed by the legislature. The onus is on the assessee to strictly prove fulfillment of all statutory parameters for claiming a deduction.
