DISALLOWANCE OF THE EXP DEB IN CWIP REQUIRING TDS DEDUCTION

This query is : Resolved

Akhil Agrawal (Querist)
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19 May 2008 A CO X IS IN THE PROCESS OF SETTING UP A NEW RETAIL OUTLETS. THE FEES OF THE LEGAL CONSULTANTS/ARCHITECTS/CONTRACTORS PAID HAS BEEN CAPITALIZED IN THE CWIP unless the sale at the outlet starts. now the amount remained in the CWIP & capitalized in 2007-08(on starting of the sales). the company did not deduct tds on the professional fees/contractual payment(rs 25,00,000 being capitalized). now in 2007-08 co. claims the depre on the capitalized amount of rs 2500000.

should now the exp(i.e dep)be disallowed. if yes than the amount of dep should be disallowed every year co. charges dep on Rs 2500000(since wdv method in I.T act 1961 the asset will never bcum nil)