35D CAPITAL EXPENDITURE

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atul (Querist)
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11 January 2008 HELLO SIR

EXPENSES INCURRED SUCH AS STAMP DUTY REGISTRATION (ROC) ECT FOR INCREASE IN AUTHORISED SHARE CAPITAL OF PVT LTD CO. WHETHER IT IS ALLOWED U/S 35D AS A BUSINESS EXPENSE,
THE ACIT HAS DIALLOWED IT SAYING IT IS CAPITAL EXPENDITURE AND NOT ALLOWED AS EXPENSE
SO CANT WE CLAIM 1/5TH OF EXPENSE EVERY YEAR UNDER 35D

R.V.RAO

R.V.RAO (Expert)
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11 January 2008 EXP. ON INCREASE IN AUTH. CAPITAL IS CAPITAL EXP.
THERE ARE DECIDED CASE LAW ON THIS.
AS FAR AS SEC 35 D IS CONCERNED,
PRELIMINARY EXP. AMORTISATION, ONLY THOSE EXP. INCURRED BEFORE THE COMMENCEMENT OF BUSINESS OR AFTERC COMMENCEMENT,IN CONNECTION WITH EXTENSION OF AN IND. UNDERTAKING OR SETTING UP A NEW IND.UNIT ,SUCH EXP. QUALIFY FOR AMORTISATION.
SO IN YOUR CASE,IF THE INCREASE OF AUTH. CAPITAL IS FOR ABOVE PURPOSES STATED, AND IF DOCUMENTARY EVIDENCE CAN BE PRODUCED BEFORE THE ASSESSING OFFICER ON DEMAND,
YOU MAY CLAIM AMORTISATION BENEFIT UNDER SEC. 35 D.
R.V.RAO