ROC EXP
This query is : Resolved
Ramesh Kumar Bhatter
(Querist)
05 August 2010
EXPENDITURE INCURRED FOR INCREASE IN AUTHORISED CAPITAL IS REVENUE EXPENDITURE OR WILL BE CAPITALISED AND WRITTEN OFF IN 5 YEARS AS PRELIMINARY EXPENSES
Aditya Maheshwari
(Expert)
05 August 2010
It is a very arguable matter as share issue expenses are not defined as per AS - 26 and whether this type of fees is covered under it or not and hence you may write it off in one year itself or may write off in 5 years.
Ideally and also Many companies do capitalise and write it off over a period of 5 years.
In Income Tax the same will be allowable u/s 35D in 5 equal instalments only subject to conditions mentioned in that section are satisfied.
Ideally and also Many companies do capitalise and write it off over a period of 5 years.
In Income Tax the same will be allowable u/s 35D in 5 equal instalments only subject to conditions mentioned in that section are satisfied.
05 August 2010
Agree with Aditya. however, i have also observed that in books such expenses are expensed off in the first year itself by many companies.
Aditya Maheshwari
(Expert)
06 August 2010
Yes in books such expenses are expensed off in the first year itself by most of the listed companies but in case of unlisted companies there is no consensus.
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