Hi Friends can anybody guide me whether the following expenses will be treated as Capital or Revenue?
1) Fees paid to ROC for registration
2)Feasibility and market study exp incurred by the co.
3)Factory site preparation
4)Registration fees for 100% EOU
Thanks n advance frndz
according to me all 4 are examples of preliminary expenses and hence deferred revenue expenses
Are these allowable u/s 35D of IT Act?
yes normally all are eligible expenses u/s 35D
but in case of feasibility and factory site preparation it is allowable if incurred by assessee himself or any other approved person
They are restricted to 5 % of the project isnt it?
yes deduction for corporate is 1/5 * lower of {eligible expenses & [ higher of 5% of cost of project & 5% of capital employed]} and for non-corporate 1/5 * lower of eligible expenses & 5% of cost of project
The Income Tax Law...
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you can keep it as wip till the projects are ready and u gt registration numbers .once the formalities are over ,write it off n p&l a/c.
what others are saying is as per IT act. While accounting we are not concen with it
As per accounting point of view Deferred revenue expenses are to be shown as assets under the head misc exp and written off evry year
YES MISS NIKKY IS RIGHT AS PER PRESENTATION OF BALANCE SHEET ITEMS DEFFERED EXP SHOULD BE SHOW IN MISC EXPENDITURE HEAD IN BALANCE SHEET
YES MISS NIKKY IS RIGHT .
CAclubindia
