Amortisation of expenses over a period
This query is : Resolved
05 July 2009
Hi!
A Company raised its authorised share capital during the fin. year and paid substantial amount towards ROC fees. Now the Company wants to amortise it over a period of three years in Balance sheet, which that can do. My question is what will be the treatment for Income tax point of view? whether it is allowable in the year of payment or as per company's amortisation, it will be allowed in three years? Readers views are solicited urgently.
Thanks!
U S Sharda
A Company raised its authorised share capital during the fin. year and paid substantial amount towards ROC fees. Now the Company wants to amortise it over a period of three years in Balance sheet, which that can do. My question is what will be the treatment for Income tax point of view? whether it is allowable in the year of payment or as per company's amortisation, it will be allowed in three years? Readers views are solicited urgently.
Thanks!
U S Sharda
05 July 2009
The roc fees which you pay for increase in capital will not be allowed as a business expenditure. Only intial fees you pay at the time of incorporation will be allowed as preliminary expenses which can be amortised over a period of 5 years.
Eventhough you debit to profit and loss account it will be a disalowed and added to back to income for income tax purpose.
Eventhough you debit to profit and loss account it will be a disalowed and added to back to income for income tax purpose.
05 July 2009
Fees payable to the ROC for enhancement of capital is a capital expenditure not deductible u/s 37(1) but deductible u/s 35D.
Citation:- Punjab State Industrial Development Corp Ltd 225 ITR 792 (SC).
Citation:- Punjab State Industrial Development Corp Ltd 225 ITR 792 (SC).
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Capital gain from sale of house property
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- TDS on Purchase of Immovable Property by NRI from NRI
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Multiple trade mark
- Regarding TDS Applicability For Director Remuneration
- FORM 26A APPLICABILITY
- LC charges in relation to Asset purchased should be Capitalised ?
- Value of property in capital gain
- Transporter Declaration form
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
