16 July 2010
under companies act it should be written off in the year in which it is incurred. ie preliminary exp should not be carried forward as per AS 26 As per section 35D 1/5th of the cost of the project or capital employed at the option of the company will be allowed as deduction ie in the given condition since 1/5th of the share capital is more than the exp incurred actual exp incurred wil be allowed as deduction. ie Rs.79,479/- in five equal installments. ie in the current year Rs 15,896/-. Since given at the option of the company, every company will choose the higher of the two ie capital employed or cost of project
17 July 2010
Ya m sorry it is 5% of the cost of the project or Capital employed at the option of assessee. And so 25000 will be allowable in 5 years. ie 5000 each year
CAclubindia
