Public Issue Expenses and its tax treatment

Sujit Talukder (service) (719 Points)

12 March 2009  

A Limited company, engaged in real estate sector , incorporated in the year 2001 has incurred certain expenditure on Public issue Expenses. this amount is ariund Rs 4.00 crore. However, due to recent poor market condition, the company didnot bring the issue to the public and the IPO plan is scrapped now.

The company wants to write off the Public issue expenses.

Now my query is:

1. Can the company write off the failed IPO/Public issue expenses ? ( as per Comapnies Act/Accounting Standard provisions)

2. Whether such write off will be allowed under the Income Tax Act? If yes, under which section?