35D - Capital employed calculation for extension of business

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Y Chandra Mohan Reddy (Querist)
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30 September 2009 Friends,

We have a paidup share capital of 20 Cr at the balance sheet date. Out of that Rs 5 Cr is raised only in the last quarter, for which we have incurred capital expenses and we wish to claim the same u/s 35 D. Now in this case, whether the capital employed is to calculated as 5% of Rs 20 Cr or 5% of Rs 5 Cr?

Also please provide the format for computation of capital employed, if any?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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01 October 2009 Capital employed is to be calculated as 5% of Rs 20 Cr. and not of 5 cr.

Capital employed means issued share capital
plus debentures and long term borrowings(from FIs OR Banks) as on the last date of the previous year.

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