Pre operative expenses / income

This query is : Open

deepika dhakad (Querist)
Follow

09 September 2011 A company has incorporated in the year 2008 for Marble Trading but business is not yet started. It have a land from which it has earned income approx Rs. 30000/- also Interest received on deposit with Bank. Wheteher such incomes will adjusted with Pre operative expenses or other wise. Plz suggest its treatment in Balance Sheet and Income tax

Pragnesh

Pragnesh (Expert)
Follow

09 September 2011 As per my view, you can consider these income under income from other sources. while the Preoperative Expenses Are treated As A defeerred Revenue Expenditure And Amortised Over A Period Of 5-7 Years. The Tax Treatment Is As Done For Other Deferred Expenditure And The Profit & Loss A/C Is Debited For The Apportioned Annual Amount Every Year