India - Income Tax Act 2010 - Saarc

1.229 CH. IV - COMPUTATION OF BUSINESS INCOME S. 35D69[Amortisation of certain preliminary expenses.7035D. (1) Where an assessee, being an Indian company or a person (other thana company) who is resident in India, incurs, after the 31st day of March,1970, any expenditure specified in sub-section (2),—(i) before the commencement of his business, or(ii) after the commencement of his business, in connection with theextension of his 71 [***] undertaking or in connection with his setting upa new 71 [***] unit,the assessee shall, in accordance with and subject to the provisions of this section,be allowed a deduction of an amount equal to one-tenth of such expenditure foreach of the ten successive previous years beginning with the previous year inwhich the business commences or, as the case may be, the previous year in whichthe extension of the 71 [***] undertaking is completed or the new 71 [***] unitcommences production or operation :72[Provided that where an assessee incurs after the 31st day of March, 1998, anyexpenditure specified in sub-section (2), the provisions of this sub-section shallhave effect as if for the words “an amount equal to one-tenth of such expenditurefor each of the ten successive previous years”, the words “an amount equal toone-fifth of such expenditure for each of the five successive previous years” hadbeen substituted.](2) The expenditure referred to in sub-section (1) shall be the expenditurespecified in any one or more of the following clauses, namely :—(a) expenditure in connection with—(i) preparation of feasibility report;(ii) preparation of project report;(iii) conducting market survey or any other survey necessary for thebusiness of the assessee;(iv) engineering services relating to the business of the assessee :Provided that the work in connection with the preparation of thefeasibility report or the project report or the conducting of marketsurvey or of any other survey or the engineering services referred toin this clause is carried out by the assessee himself or by a concernwhich is for the time being approved 73 in this behalf by the Board;(b) legal charges for drafting any agreement between the assessee andany other person for any purpose relating to the setting up or conductof the business of the assessee;(c) where the assessee is a company, also expenditure—(i) by way of legal charges for drafting the Memorandum andArticles of Association of the company;(ii) on printing of the Memorandum and Articles of Association;69. Inserted by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971.70. For relevant case laws, see Taxmann’s Master Guide to Income-tax Act.71. Word “industrial” omitted by the Finance Act, 2008, w.e.f. 1-4-2009.72. Inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1999.73. For list of approved concerns, see Taxmann’s Master Guide to Income-tax Act.