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Treatment of exp on share capital increase & allotment

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Querist : Anonymous

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Querist : Anonymous (Querist)
07 January 2011 Dear All,

If a Pvt Ltd company incurred expenditure for increas in authorize share capital (ROC fees, stap duty etc) and subsequently incurred exp on issuing new shares, than

1) What will be the Accounting treatment for such expenses?
2) What will be the IT treatment of such expenses?

Pls explain with example if possible

Thanks
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CMA. Dinesh S Adhikari, ACMA

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CMA. Dinesh S Adhikari, ACMA (Expert)
07 January 2011 As per my thinking after incorpration whatever expenses made on issue or re-issue of share capital that are Revenue Exp., therefore it should be treated as revenue exp. in both accounting and income tax.

let the other experts show their views on this.

Regards!!!
Dinesh S. Adhikari
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Querist : Anonymous

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Querist : Anonymous (Querist)
08 January 2011 Hi,

Can other also advice on above?

Thanks
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CA Shailesh Kumar Bhagat

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CA Shailesh Kumar Bhagat (Expert)
09 January 2011 It may be accounted as deffered revenue expenditure.

As per income tax section 35D, 1/5 deduction is allowed in 5 years.
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