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Fees paid to roc for increase of authorised capital (Income Tax)

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( Author )
15 December 2011

Hello please carefully see this question.

Our's is a Infrastructure Company. We incurred ROC Fees towards increase of Authorised Capital. As we know that the same could not be claimed as deduction U/s 37(1) of IT Act as it is Capital expenditure.

I came to know that sec-35D is not applicable to Infrastructure Company as per Ansal Housing & Construction Ltd V CIT (HC) ITA Nos.1261,1278 & 1402 of 2008 .


My question is how this expenditure to be written of in the P&L.

Kindly please resolve my problem.


Thanks & Regards




CA Navin Jain

( Expert )
15 December 2011

As per Companies act, you can directly transferred to p&l account or shown as misc exp. in balance sheet or adjust with free reserve also.
but that type of expenses would be disallowed as per income tax act if transferred to profit and loss account.


CA AYUSH AGRAWAL

( Expert )
15 December 2011

Well, Under income Tax act, You Can Claim Expenses as 1/5th Every year, U/s 35D as a project expenses.

and regarding case of ansal Infra Pls Read These Line.....
U Will Get Clarity......


45. It may be noted that the provision for amortization is not intended to supersede any other provision in the income - tax law under which the expenditure is allowable as a deduction against profits. For instance, where a company which is already in business, incurs expenditure on issue of debentures, and such expenditure is admissible as a deduction against profits of the year in which it is incurred by virute of the decision of the Supreme Court in the case of India Cements Ltd. v. CIT (SC) [1996] 60 ITR 52, s. 35D will not have the effect of bringing that expenditure within the scope of the expenditure to be amortised against profits over a 10-year period. As a corollary to this, where any expenditure has been ITA No. 1261/08, 1278/08, 1287/08 & 1402/08 nsk Page 4 of 16 included for the purpose of amortization under s. 35D on a claim being made by the assessee in that behalf, „Such expenditure will not qualify for deduction under any other- provision of the Act for the same or any other assessment year vide sub-s. (6) of s. 35D."


CA.Leela Kumar

( Author )
15 December 2011

Hello Mr.Ayush whatever u said I already informed in my question that Sec-35D is applicable to Industrial Undertaking only and not to Infrastructure Company.


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