( Author )
22 February 2012
I have a query regarding Rule 11UA (c) (b) Income Tax Rules, 1962. Under this Rule, share valuation of unquoted shares is done for Income Tax purpose.
In valuation we have to take book value of assets reduced by Advance tax, profit and loss(dr.) balance, and any amount shown in balance sheet which does not represent the value of any asset.
Now, in our case an item in balance sheet naming Capital work in progress of a site is shown after capitalising borrowing cost(finance cost), network cost ( site rent, maintenance, power & fuel, MNP and other cost) and payroll cost (salary etc).
Do these costs can be held as unrealisable value of an asset and could be reduced from total assets for valuation purpose?????
Same cost have been incurred and capitalised and shown as an item of fixed asset and depreciation is charged on it. So what treatment can be for these cost in valuation?
Can it be reduced from total assets by considering it as an amount not representing any asset?