LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

fees paid for increasing authorised capital

Asif Khan (Taxation executive) (410 Points)

16 December 2009

is fees paid for increasing Authorised Capital of a private ltd company allowable expense under income tax

Reply
Follow
Share

22 Replies

CA Lovenish Bansal (JOB) (343 Points)
Replied 16 December 2009

No, It is capital expenditure

Regd

1 Like

kabirsen (student) (251 Points)
Replied 16 December 2009

capital expenditure

case refernce: punjab state industrial development corporation..

Asif Khan (Taxation executive) (410 Points)
Replied 16 December 2009

but i have heard that is allowable u/s 35D

kabirsen (student) (251 Points)
Replied 16 December 2009

35d is abt pre-incorporporation exp and specifies a list of expense which does not include "increase of authorised share capital"

35d inter alia includes

legal charges for moa/aoa, printing of moa , expense in connection to issue , public subscripttion, enderwriting commission ,brokerage, prospectus drafting expense

1 Like

shashank (CA final student) (259 Points)
Replied 16 December 2009

Yeh it should be capitalized

1 Like

Ravinder (Sr. Accounts Officer) (155 Points)
Replied 16 December 2009

its a capital exps

Hareesh H Sharma (Cleared IPCC..now article) (894 Points)
Replied 16 December 2009

Yea i guess there was a recent case when it was disallowed..some bank or so...

AJAY PRATAP (FINANCIAL CONSULTANT) (72 Points)
Replied 16 December 2009

The fees paid for increase in authorised capital is capital in nature so the same cannot be allowed u/s. 37.

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 17 December 2009

It is capital expenditure for Income Tax Act. however, the company can charge it to profit and loss account. But it will be disallowed in Income Tax computation and will form a part of permanent difference.

CA Sidhi Gaur (Chartered Accountant) (247 Points)
Replied 17 December 2009

agree..wid d above ans.

Archit Goyal (Learning Professional) (344 Points)
Replied 17 December 2009

sure yaar just allow in 37(1)

sasmitha (Practise in Raipur) (65 Points)
Replied 17 December 2009

yes it is capital expenditure

VIGNESH (Manager Finance &Accounts) (327 Points)
Replied 17 December 2009

Fees paid to increase authorised capital is not a allowable expenses, so it shold be capitalised

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 17 December 2009

Originally posted by : kabirsen
	35d is abt pre-incorporporation exp and specifies a list of expense which does not include "increase of authorised share capital" 35d inter alia includes legal charges for moa/aoa, printing of moa , expense in connection to issue , public subscriptttion, enderwriting commission ,brokerage, prospectus drafting expense