Treatment of deferred revenue exp.

Dear Anshul,

As per my opinion: 

For the Expenditure to get qualified as a capital Asset, the same should create a Tangilble or an intangilble asset in acccordanec with the AS 10 or AS 26, as applicable.. 

As per AS10 "Fixed asset is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business"

On the basis of the above definition as per the applicable standard, the expenditure can be capitalised as Capital Asset and also claimed depreciation in the books of Accounts.. 

And The Income tax Act doesnt recognise the concept of Deferred Revenue expenditure untill and unless specifically so provided in the Act , eg: Preliminery Expenses u/s. 35D..

The same can be construed under the catagory of Plant & machinery, also as per my opinion there is no specific rate specified in the rules or related notifications as such, for this Asset thus the general rate of 15% may be applied...

These statements are purely my opinion... Kindly lemme know for any other view which can be taken on the same... 

Regards,

Srikanth.M.S