About preliminary expenses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 November 2014 Dear Sir,
What is the treatment of preliminary expenses.My query is Preliminary expenses incurred in C.Y. Rs. 15000. As per Companies Act 2013 all Preliminary Expenses should be in C.y. No preliminary expenses should be carry forworded.
But as per Income tax Act Preliminary expenses should be allowable in 5 Yrs.
Then what is treatment of disallowable expenses.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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30 November 2014 As per section 35D of Income Tax Assessee has claim preliminary expenses in 5 years i.e. 20% for year.

Further, the aggregate of total preliminary expenses cannot exceeds 5% of total cost of the project/capital