21 October 2009
An unlisted Pvt Ltd Company has increased its paid-up capital and paid Rs. 109,500 to ROC as fee. The auditor of the Company has disallowed even the 1/5th of the fee also while computing the provision for income tax for the year 08-09. i read that ROC filing fee is not a revenue expenditure which imply that it is capital expenditure and can be written-off over a period. can someone explain me whether the auditor is correct. If not mention the section under which the fee paid can be written-off or amortized?
21 October 2009
Filing Fees to ROC is a capital Expenditure as per Supreme court in the Brook Bond India case. The stand taken by the auditor is not correct
21 October 2009
Your auditor is correct. Section 37 deals with the allowance of above expenditure. Since it will not generate any income it is being disallowed.
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