Preoperative expenses

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MADHU SUDHAN K (Querist)
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02 September 2011 Dear All,
A company was incorporated on 05-05-2010. All preoperative expenses related to incorporation was accounted as per IT and Company laws. On 03-09-2011 company filed form 5 for increase of authorised capital. Expenditure for the same was accounted for 100% expenditure as filing fee/rates & taxes. Because this is not a preoperative expenditure. Is it correct or not?
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CA Navin Jain

CA Navin Jain (Expert)
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02 September 2011 expenditure related to increase of authorized share capital can be transfer to profit and loss account as per companies act but same shall be disallowed as per income tax act since as per income tax act expenditure related to increase of authorized share capital will be treated as capital expenditure.