Deferred Expenditure

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

Kamlesh

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

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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25 December 2008 Option two - If the amount expended is a huge, then you can also capitalise this amount as building.

Kamlesh

Kamlesh (Querist)
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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.