ITAT Upholds Gujarat Gas Ltd.’s Deduction for Stamp Duty Provision u/s 35DD, citing Full Payment of Duty

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, upheld Gujarat Gas Ltd.’s deduction under Section 35DD of the Income Tax Act for stamp duty expenses. The issue pertained to payments made toward obtaining a merger scheme’s approval under the Companies Act. Gujarat Gas Ltd. contended that the stamp duty paid constituted a legitimate expense for amalgamation, qualifying for deductions under Section 35DD, which allows amortization over five years. The ITAT concluded that the company had fulfilled all conditions for this deduction, noting that the stamp duty payment had been fully discharged. The ruling clarified that such provisions are intended to support corporate restructuring by offsetting related expenses. This decision benefits companies undertaking mergers and acquisitions, reinforcing their ability to claim tax deductions for essential amalgamation-related costs.