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Pre-operative expense

Tax queries 522 views 1 replies

One of my client is a new company incorporated during the F.Y. 2010-2011. It has not started commercial activities. What shud i do to the pre-operative expenses. Can i prepare a P&L A/c ( even though no income is generated for the comapny during the year ) and file Loss IT Return so that my client could claim the loss next year ?  Or shud i accumulate the expenses as pre-operative expenses and disclose it in  the Balance Sheet ? But if i accumulate the expenses how will i amortize it next year ?

 

Looking for an early reply 

 

Regards,

Suraj

Replies (1)

https://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=0ee347f6-5107-4de1-8025-be0bab52def0&rdb=sec&yr=e5be6bdb-1fc4-42d6-ac7b-34a44fd65485&sec=&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws

ABOVE LINK IS FOR SECTION 35D WHICH CLARIFIES TAX TREATMENT FOR PRE-OPERATIVE EXPENSES .

FINANCIAL YEAR FOR WHICH IT RETURNS HAS BEEN FILED SHALL BE SAME AND MATCHING WITH ROC FILING FINANCIAL YEAR OR ELSE NEW XBRL FACILITIES MAY CREATE DISCIPLINARY PROBLEMS


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