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Deferred advertisement expenditure

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(Querist)
25 May 2013 hi,
A Pvt Ltd company made a huge advertisement exp to promote its new branch. it treated it as deferred revenue expenditure in books of accounts for a period of three years. but for the purpose of Income Tax it treated it as revenue exp in one year.. is this allowable in INCOME TAX ACT as we as COMPANY ACT

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CA Sourabh Agarwal

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CA Sourabh Agarwal (Expert)
25 May 2013 It is not an Asset at all. Neither in Income Tax, nor in Companies Act, and nor in Accounting GAAP.
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
13 July 2013 Since the benefit of the advertisement is not related to one year you can spread it over a period of 3 years and accordingly you can capitalise as deferred revenue expenditure which will appear on the debit side of the balance sheet under the head miscellaneous expenses not written off.
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