ROC Fees : Whether Capital or Revenue ?

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Anwar Shaikh (Querist)
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17 March 2009
Hello Experts,

If any company pays ROC Fees of Rs.90,000/- & Franking Charges Of Rs.45,000/-
For increase in authorised capital from Rs.5,00,000/- to 50,00,000/-
Whether this 1,35,000/- (90000+45000) should be capitalised or transferred to profit and loss account or
Treated as deferred revenue expenditure or Misc. expenditure to the extent not written off .

The company is not newly incorporated . it is 10 years old company .

CA LOKESH KASAT, FCA, M.Com

CA LOKESH KASAT, FCA, M.Com (Expert)
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17 March 2009 Dear Anwar,
it is a revenue expenditure and will be transferred to P&L A/c.

DR GAURAV GUPTA FCA, FCS, LL.B

DR GAURAV GUPTA FCA, FCS, LL.B (Expert)
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17 March 2009 FEES IS REVENUE EXPENDITURE BUT IF IT IS RELATED WITH INCREASE IN AUTHORISED CAPITAL THEN IT WILL BE CHARGED IN PL BUT NOT DEDUCTABLE u/S 37 OF I.T. ACT

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M KRISHNAKUMAR

M KRISHNAKUMAR (Expert)
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17 March 2009 fees paid for increase of authorised capital is capital expenditure for the purpose of IT act. but it is an eligible expenditure when you compute book profit for the purpose of MAT sec 115JB. however if any listing fee is paid it is revenue.

relevant case law - punjab state industrial development corpn ltd 225ITR 792 (sc)