Accounts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2013 Hi Friends,

We have client which was incorporated in F.Y 2012-13, during the financial there was no Income at all, only Expenses of Rs.99500(roughly) was incurred saying that Pre Incorporation and, Pre Operative Expenses and which Also includes Rs.500 Dep. on Fixed Assets. Now My query is whether I should Prepare P&L Statement or Not, stating That above Expenses. But as per my openion these should be Shown under Non Current Assets As a Miscellaneous Exp. to the extent not written off. But in recent past we have received a notice from IT Department stating that the Assessee has not disclosed the P&L Amounts in Return of Income.how it is Possible to amortize Preoperative Expenses without having Income in P&L A/c. Pls suggest me how to handle this Problem.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 November 2013 you need to charge the expenses to Profit and loss account and show loss as net result. You need to charge the expenses and carry on the accumulated losses. When you start making profit the accumulated loss shall be wiped off.

With regards to depreciation, the same shall be allowed only if the assets have been put to use.

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