In Brief
A public pharmaceutical company claimed amortization of share-issue expenses over 10 years under Section 35D for industrial expansion, and deduction for employee bonus paid through a trust. The Assessing Officer allowed the claim initially but later disallowed it citing a prior judgment. The High Court upheld the disallowance on both counts. The Supreme Court allowed the appeals, holding that Section 35D explicitly permits such amortization for expansion-related expenditure, and once allowed in initial years with factual confirmation, it cannot be denied in subsequent years of the 10-year block. On bonus, the Court held that Section 40A(9) does not apply to bonus payments under Section 36(1)(ii), and payment through a trust satisfies the 'actual payment' requirement if received by employees within the prescribed time."
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