treatment of loss in case of parntership firm

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thavnesh kumar (Querist)
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17 November 2010 A parntership firm constitued on 03.05.2009. Partnership firm could not start business up to 31.03.2010. But expenditure incurred during this period Rs. 4,20,212/-as a staff salary, office rent.It means firm incurred loss of Rs. 4,20,212 . What will be the treatment of this loss during the f.y. 2009-10. whether this loss will be distributed between partners in profit sharing ratio or whether loss will be capitalized as a pre-operative expenses and defferred in next 5 financial year if firm start the business in next financial year.

DR GAURAV GUPTA FCA, FCS, LL.B

DR GAURAV GUPTA FCA, FCS, LL.B (Expert)
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17 November 2010 loss will be adjusted against the capital of partners however in income tax these losses will be carried forward and would be taxable in the coming year.