Admissability of Share Transfer Expenses
This query is : Resolved
17 August 2009
Dear All
A Limited company has allocated part of its IPO expenses to Promoters and the promoters claimed the same as expenses on transfer, while computing Capital gain in their hand. The expenses allocated are pertaining to the issue of promoters holding through the IPO Issue.
Query
Whether a limited company can allocate the IPO-Share Issue expenses to its promoters?
Whether the promoters can claim Capital Gain Exemption by treating the same as expenses on transfer?
Can anybody refer some Case Laws in this regard?
A Limited company has allocated part of its IPO expenses to Promoters and the promoters claimed the same as expenses on transfer, while computing Capital gain in their hand. The expenses allocated are pertaining to the issue of promoters holding through the IPO Issue.
Query
Whether a limited company can allocate the IPO-Share Issue expenses to its promoters?
Whether the promoters can claim Capital Gain Exemption by treating the same as expenses on transfer?
Can anybody refer some Case Laws in this regard?
CA. B.SRINIVASULU
(Expert)
17 August 2009
The expenses of one entity cannot be shifted to others by journal entries or without basis.
The ipo expenses relates to the company. A company is a seperate entity under law. Therefore the promoters cannot share the expenses.
The expenses cannot be transferred and they cannot claim the same in their individual return.
Case laws I will refer and tell in a couple of days.
The ipo expenses relates to the company. A company is a seperate entity under law. Therefore the promoters cannot share the expenses.
The expenses cannot be transferred and they cannot claim the same in their individual return.
Case laws I will refer and tell in a couple of days.
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