EXPENSE ON PUBLIC ISSUE

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Vishal (Querist)

12 March 2017 As per 35D, one fifth is allowed for expenditure incurred for expense on public issue of shares of the company.. However, any expense on public on public issue of shares are not allowed as per recent judgement of Brooke Bond.. Please clarify it..

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)

14 March 2017 section 35D relates to Amortization of certain preliminary expenses and not relates to expense on public issue and yes expense incurred on public issue is not allowed as per judgement under broke bond case.

Kindly note following expenses shall be eligible for deduction under Section 35D.

> Expenditure in connection with
- preparation of feasibility report;
- preparation of project report;
- conducting market survey or any other survey necessary for the business of the assessee;
- Engineering services related to the business of the assessee

> Legal charges for drafting any agreement between the assessee and any other person for• any purpose relating to the setting up or conduct of the business of the assessee.

> The following expenses in case of company assessees
- legal charges for drafting the Memorandum and Articles of Association of the company;
- expenses incurred on the printing of Memorandum and Articles of Association;
- by way of fees for registering the company under Companies Act, 1956;

> in connection with the Issue, for public subscription of shares, and debentures of the company, being underwriting commission, brokerage and charges of drafting, for typing, printing and advertisement of the prospectus.

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