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Share capital

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(Querist)
15 December 2011 What is the treatment of 'expense on increase in authorised share capital' in books of accounts and income tax purpose?
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CA. RICHI SAXENA

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CA. RICHI SAXENA (Expert)
16 December 2011 Fees paid for increase in authorised capital is capital in nature and is not deductible u/s 37 as per many judgements given by high courts. So the expenses as such are required to be capitalised.

CA. Richi Saxena
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Tejasvi gupta

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Tejasvi gupta (Querist)
17 December 2011 Thank you for the above information, but what is the treatment of the same in books of accounts?
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CA. RICHI SAXENA

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CA. RICHI SAXENA (Expert)
17 December 2011 Debit Share issue expenses account and credit bank account. And thereafter use section 35D and deduct this amount in five installments in profit & loss account for the next five years.
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