Preliminary Expenses

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Querist : Anonymous

Querist : Anonymous (Querist)

11 December 2010 When a company promote a subsidiary company and become 100% sharehoders in that subsidiary coampny, can it make preliminary expnses on behalf of the subsidiary comapny and calim the expenditure in his income tax return.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 December 2010 The expenditure will be Preliminary Expenses of the Subsidiary Company. However, holding company may incur such expenditure on behalf of Subsidiary company for recovering the same after the board of subsidiary ratifies the same.

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Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2010 Sir, can holding comapny calim this expenditure as preliminary expnses.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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19 December 2010 No sir, The expenditure is incurred in connection with the Subsidiary Company which is also an assessee for Income Tax purpose.

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