Allowability of expenditure made by private company.
This query is : Resolved
16 May 2012
Dear All,
I have query that -
1. Can a company write off revenue expenditure incurred during the financial year but business operations have not been started.
2. Can a company claim depreciation as per income tax act if business activities have not been started.
I have query that -
1. Can a company write off revenue expenditure incurred during the financial year but business operations have not been started.
2. Can a company claim depreciation as per income tax act if business activities have not been started.
19 May 2012
Dear Parul
Answer to Query 1:
a) Till the time business operations have not been started all the revenue expenses has to be booked as preliminary expenses.
b) Preliminary expenses will be allowed as expense the moment business comes into operation at one-tenth of preliminary exp subject to provisions of section 35D.
Answer to Query 2:
Company cannot claim the depreciation. Same answer as mentioned above.
Answer to Query 1:
a) Till the time business operations have not been started all the revenue expenses has to be booked as preliminary expenses.
b) Preliminary expenses will be allowed as expense the moment business comes into operation at one-tenth of preliminary exp subject to provisions of section 35D.
Answer to Query 2:
Company cannot claim the depreciation. Same answer as mentioned above.
19 May 2012
Dear Mayank Chopra Ji,
Can a company book general running & maintenance expenditure like office exp. , staff welfare , salary and other revenue expenditure?
Can a company book general running & maintenance expenditure like office exp. , staff welfare , salary and other revenue expenditure?
20 May 2012
yes company can book such expenses as work in progress but can only claim it in the year of commencement of business & sec 35 D will apply.
CA Mayank Chopra
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CA Mayank Chopra
Mob: +91 97111-87962| +91-9999-37-8800|
Email: ca.mayankchopra @ gmail.com
Skype: mayank.chopra17
Like my Facebook page: https://www.facebook.com/camchopra
Facebook profile : https://www.facebook.com/camayankchopra
Linkedin: http://in.linkedin.com/in/camayankchopra
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