Amortisation of expenses over a period
This query is : Resolved
05 July 2009
Hi!
A Company raised its authorised share capital during the fin. year and paid substantial amount towards ROC fees. Now the Company wants to amortise it over a period of three years in Balance sheet, which that can do. My question is what will be the treatment for Income tax point of view? whether it is allowable in the year of payment or as per company's amortisation, it will be allowed in three years? Readers views are solicited urgently.
Thanks!
U S Sharda
A Company raised its authorised share capital during the fin. year and paid substantial amount towards ROC fees. Now the Company wants to amortise it over a period of three years in Balance sheet, which that can do. My question is what will be the treatment for Income tax point of view? whether it is allowable in the year of payment or as per company's amortisation, it will be allowed in three years? Readers views are solicited urgently.
Thanks!
U S Sharda
05 July 2009
The roc fees which you pay for increase in capital will not be allowed as a business expenditure. Only intial fees you pay at the time of incorporation will be allowed as preliminary expenses which can be amortised over a period of 5 years.
Eventhough you debit to profit and loss account it will be a disalowed and added to back to income for income tax purpose.
Eventhough you debit to profit and loss account it will be a disalowed and added to back to income for income tax purpose.
05 July 2009
Fees payable to the ROC for enhancement of capital is a capital expenditure not deductible u/s 37(1) but deductible u/s 35D.
Citation:- Punjab State Industrial Development Corp Ltd 225 ITR 792 (SC).
Citation:- Punjab State Industrial Development Corp Ltd 225 ITR 792 (SC).
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Inventory of finished goods
- Tds on building rent monthly
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Sale of property furniture sale
- RCM INVOICING FROM NOV-2024
- Disallowance of Section 43B(h) to sez units
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- GST Regis.
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Confusion around Form 26QB fields
- As per schedule III of balance sheet how to pass journal entry
- Is correct way to find out capital of individual on 31st March
- Individual capital equal to which assets of balance sheet
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
