Preliminary expenses w/off conflict b/w accounts & tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2012 According to Accounts, we will write off all the preliminary expenses in the year in which it was incurred (as revised schedule VI also does not given any place for preliminary expenses). But what we will do of preliminary expenses in tax, as in tax according to the section 35D, preliminary expenses is written off over 5 successive years??

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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28 June 2012 Answer given by you is right.
now what you want to ask???

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2012 i just want to ask dat do we need to ceate a deffered tax asstes

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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28 June 2012 Yes, Deferred tax asset will be created on the balance amount.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 June 2012 The procedure you adopted is correct which leads to a 'timing difference' on which deferred tax asset has to be necessarily recognized in books.