Deffered tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 August 2012 A Pvt. ltd. (Unlisted Co.)has increased its issued capital from Rs. 1 Lac to Rs. 801 Lacs by issue of shares. Now, the question is whether the co. is liable to create DTA/DTL u/s 35D for extension of undertaking. If yes, then what will be amount?
Actual expenses in books for increase in capital is Rs. 13,89,240/-. And Capital at the year end is Rs. 801 Lacs.
The crux of the issue is whether increase in capital will amount to extension of undertaking?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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10 August 2012 Here instead of looking into 'extension of undertaking' as given in section 35D(1)(ii), whether the referred expenditure fits in 35D(2)(c)(iii) or not has to be seen. Delhi high court in the case of Hindustan Insecticides Ltd's case 250 ITR 338 gave a verdict in the favour of revenue . Hence AS-22 can't be applied.

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