Deferred Expenditure

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This query is : Resolved

Kamlesh (Querist)

23 December 2008 A Proprietor has incurrend an expenditure of huge amount on rented premises for starting of new business. A rent agreement is non cancellable within period of three years. My question is
Can such expenditure claim over a period of 2 or 3 or 5 years in Income tax Act. Please answer with a case law or section or notification or circular if any.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

25 December 2008 Can you please give the details of expenses incurred by him and nature of business.

Kamlesh

Kamlesh (Querist)

25 December 2008 Expenses are in the nature of civil i.e. its relates to building renovation. Nature of Business is educational institute

Can I claim the said expenditure in 2 years i.e. deferred. Secondly, since its a rented premises, i can't capitalised.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

25 December 2008 Option one - You can claim all the expenditure in the current year.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)

25 December 2008 Option two - If the amount expended is a huge, then you can also capitalise this amount as building.

Kamlesh

Kamlesh (Querist)

25 December 2008 Can I claim the said expenditure in 2 years i.e. deferred. Secondly, since its a rented premises, i can't capitalised.