Question

This query is : Resolved

Guest

Guest (Querist)

23 February 2010 We are a New Private Limited Company

We are doing feasibility study for a large power project but at the end of 31st March 2010 (first financial year of company) feasibility will not end.

In the meantime we have incurred office expenses, expenses on payment of consultants (who is doing feasibility).

We also earned some interest income on our balance in bank and FD's
What is the treatment of these Expenses and Income under Income Tax Act.

Give Your Expert Opinion

Amol Gopal Kabra (CA,CS,DISA)

Amol Gopal Kabra (CA,CS,DISA) (Expert)
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23 February 2010 Regarding Income, the income shall be shown in the year of earning. However, the expenditure regarding the feasibility study shall be considered as preliminary expenditure for the project and shall be capitalised in the project cost. In case of any other opinion, do let me know.