Expenses on issue of preference shares
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
12 April 2013
expneses incurred on issue of preference shares is capital or revenue nature?
Whether it is allowed or disallowed and under which section?
Whether it is allowed or disallowed and under which section?
12 April 2013
Tax treatment
It was held that share issue expenses are capital for income-tax purposes. As a result, it is not deductible from profits. The only exception can be inferred from a reading of S.35D of the Income Tax Act, dealing with amortising of preliminary expenses. If the issue is made to finance a project, share issue expenditure constitutes preliminary expenditure for the purposes of this section. Therefore, such expenditure, subject to the limits specified under this section, can be amortised over a period of five years commencing from the year in which the project starts generating income.
It was held that share issue expenses are capital for income-tax purposes. As a result, it is not deductible from profits. The only exception can be inferred from a reading of S.35D of the Income Tax Act, dealing with amortising of preliminary expenses. If the issue is made to finance a project, share issue expenditure constitutes preliminary expenditure for the purposes of this section. Therefore, such expenditure, subject to the limits specified under this section, can be amortised over a period of five years commencing from the year in which the project starts generating income.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- STCG....................................................
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- TAN for Partnership
- Treatment of Pension ?annuity returns on PMVY
- Sales return eway bill
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- Loan by Partnership Firm
- TDS related Query_Liquidated Damages
- Long Term Service award taxability in hands of company
- Free lancer income
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
