We are a Pvt. Ltd. Co. engaged in generation electricity by wind. The company was incorporated to set up 50 MW power plant. In the process the company acquired the exiting 10 MW wind farms and balance wind farms are to be procured and installed.
The COD of 50% of proposed project was completed as at the end of the financial year.
In the process of implementation of the project and acquisition of exiting plant, the company generated revenue by sale of power and used for project implementation, thereby reduced the borrowings.
Question: Whether the revenue generated during the implementation amounts to reduction in pre-operative expenses / project expenses or revenue liable for tax.
09 October 2012
this has to be netted off from project expenses, reducing your overall project cost. same thing happened in our case a solar power company and one of the big 4 audit firm was on this opinion.
CAclubindia
