New company formation

Hello,

I have a client who have formed Company incorporated as on 12/08/2010 which is basically doing processing of core data into big software and giving redifened data. This co. has not yer started generating income but has incurred expensses for runnig business like Rent, Salary ,Elelctricity, Telephone etc...

I just want to know wheather these expenses will be allowed as an expense as per Income Tax Aact or not. If not then how should I treat it for claiming expenses in next year.(Wheather it will be capitalised as CAPITAL W.I.P, or Technical Know -How or any thing else.

Replies (5)

This expense should be capitalised if you want other wise you claim loss during the year.

AO disalow or not it is other matter because its depend more scrutinised your paper.

on short its better you should capitalised as project expenditure and when you run the business charge to pl.

Dear Sir,

Whether Registeration charges & stamp duty charges of an LLP should be treated as revenue expenditure or capital expenditure. These expenses where paid after the LLP got its incorporation certificate.

If capital expenses , then is section 35D applicable

 

Originally posted by : CA Sanjay Jha

This expense should be capitalised if you want other wise you claim loss during the year.

AO disalow or not it is other matter because its depend more scrutinised your paper.

on short its better you should capitalised as project expenditure and when you run the business charge to pl.

Thank you sir,

 

can you tell me under which section I can claim project expenditure as an expenses and what is the period to w/off agst Income.

1. Registration Charge and Stamp duty always capitalised whether new or old.

2. expenditure before running the business is not wip it is may be project expenditure and technical know how expenditure must contains labour or consultance. 

Dear Rajesh g

all these matters not resolved in mail

in short in the book of account all these expenditure should be capitalised under current assets of the balance sheet debit side.

when business revenue generate then its depend on your CA and company generation income because if income generate minimum then you will charged gradually .

Thanks

regards

CA Sanjay jha

9990120866

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