My company has paid Rs.4.5 Lacs to ROC towards Increasing the Authorised Capital. I have come to know from SC Judgement that it is Capital Expenditure. I want to know under which provision or Section we can capitalise it and claim deduction under IT Act. Thanks for your support and advise Regards, Mohit
10 September 2010
Charge the entire amount in P & L account. Disallow for tax purpose under section 37(1) and claim 1/5th every year under section 35D.
Thanks for reply. But i have discussed the same with auditors section 35D specifically says about Preliminary Exp. means exp. incurred at the time of incorporation. As per SC judgement we can't charge in P&L account. Can we claim it under any other provision or section. one alternatively thats comes in my mind to capitalise this amount and claim 1/5th every year. But not able to find under which section or privision we can do that. Can't claim the same under IT act? Pls. confirm.
10 September 2010
But Delhi high court in (2001) 250 ITR 338 said 35D can be claimed if such expenditure is incurred in connection with the expansion of the industrial undertaking or in connection with setting up of the new industrial undertaking.
CAclubindia
