Expenses relating to issue of Debentures

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Harsha (Querist)
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01 July 2010 whether the expenses relating to issue of debentures(like professional fees,documentation fees) are preliminary expenses? company has not started its commercial operations ...project is under construction...company is a real estate company..pls give Section reference to Companies Act

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 July 2010 Section 35D(2)(c)(iv) of the Income tax Act,1961 says the referred expenditure is preliminary expenses. But Companies Act,1956 does not contain a separate section for preliminary expenses. Therefore, for accounting purpose, the company can follow Accounting Standard 26 and for Income tax purpose section 35D as well.

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