02 June 2008
A Company already doing business has increased its authorised Capital. The Expenses incurred for the same has been taken as prelimenary expenses. Is the treatment right?
Share Issue expenses and expenses on increasing authorised Share Capital, being a capital expenditure, should be shown under Misc Expenditure and should be amortised over a period of ten years
05 June 2008
Expenses relating to increase in share Capital. . . And an u please mention the section that increase in share capital is disallowed by the IT Act . . Thanking You
21 August 2008
No since the company is already in business therefore exp. incurred on increaseing Auth. cap ican not be treated as Preliminary expenses.
11 December 2009
Fees paid to the Registrar of Companies for increasing Authorised Capital will result in an advantage of enduring nature and is a Capital Exp. [Case Law- Punjab State Industrial Developement Corporation Ltd V/s CIT (1997) 225 ITR 792/93 Taxman 5 (SC)]. However u/s 35D(2)(c)(iii) of the Act,only fees paid for registration of the Company is deductible.Fees paid for increase in share capital is not fees for registration of the Company,and hence it is not amortisable under this provision-Case law CIT v/s Hindustan Insecticides Ltd.[2001] 250 ITR 338 (Delhi)
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