35D. Amortisation of certain preliminary expenses. - (1) Where an assessee, being an Indian
company or a person (other than a company) who is resident in India, incurs, after the 31st day of March,
1970, any expenditure specified in sub -section ( 2),-
(i)before the commence ment of his business, or (ii)after the commencement of his business, in connection with the extension of his
5[undertaking] or in connection with his setting up a new 6[unit],
the assessee shall, in accordance with and subject to the provisions of this se ction, be allowed a
deduction of an amount equal to one -tenth of such expenditure for each of the ten successive previous
years beginning with the previous year in which the business commences or, as the case may be, the
previous year in which the extensio n of the 5[undertaking] is completed or the new 6[unit] commences
production or operation:
7[Provided that where an assessee incurs after the 31st day of March, 1998, any expenditure specified
in sub -section ( 2), the provisions of this sub -section shall have effect as if for the words “an amount equal
to one -tenth of such expenditure for each of the ten successive previous years”, the words “an amount
equal to one -fifth of such expenditure for each of the five successive previous years” had been
substitut ed.] (2)The expenditure referred to in sub -section ( 1) shall be the expenditure specified 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;