27 August 2011
One of my client is a new company incorporated during the F.Y. 2010-2011. It has not started commercial activities. What shud i do to the pre-operative expenses. Can i prepare a P&L A/c ( even though no income is generated for the company during the year ) and file Loss IT Return so that my client could claim the loss next year ? Or shud i accumulate the expenses as pre-operative expenses and disclose it in the Balance Sheet ? But if i accumulate the expenses how will i amortize it next year as most of the expenses are in the nature of administrative expenses ?
27 August 2011
In my opinion and as per various pronouncement of legislative authorities your client is require to show such expenses in profit and loss account and file the return to income tax authority stating such losses for its allowability to set off in future period.
29 August 2011
Sir, Ya i too think its beneficial to file Loss ITR but my question is whether they are right in preparing P&L A/c as there is no income generated during the year ?
CAclubindia
