Malav (Accounts Audit Taxation and Finance ) (49 Points)
10 July 2013one of our clients has paid ROC filling fees in order to increase its Authorized Capital. Kindly guide if the under stated accounting entry is Ok.
Preliminary Expense Dr
To Bank.
Is Section 35D of Income Tax is available for this expense?
thank you
Manish Kumar Sharma
(Article)
(103 Points)
Replied 10 July 2013
No, you should book the expenses in the single year and you cannot take it to preliminary expenses
The accounting entry should be
è Filing Fees A/c ……..Dr.
To Bank/Cash/Party A/c
Further as per income tax laws expenses incurred for increase in authorized capital is not revenue expenditure hence it cannot be allowed as deduction while calculating income for tax purpose.
As far as section 35D is concerned only expenditure incurred
a) Before commencement of business, or
b) After commencement of business, in connection with extension of undertaking or in connection with setting up a new unit.
Will be allowed as deduction as per scheme provided in section 35D
Malav
(Accounts Audit Taxation and Finance )
(49 Points)
Replied 11 July 2013
thank you so much Manish. i was also of the same opinion. i will change the account head . and also i will disallow the expense in Income Tax computation
Malav
(Accounts Audit Taxation and Finance )
(49 Points)
Replied 11 July 2013
Manish, i would be greatful to you if you provide me with some case law in support of this. if any, of any tribunal, HC, SC. thanks again
vikas jha
(g)
(21 Points)
Replied 08 August 2015
Mriganka Maity
(Accounts Manager)
(104 Points)
Replied 30 June 2018
If i paid fees & filling ROC now for F.Y 2016-17.. is entry in books this year or outstanding for 2016-17???
Manish Kumar Sharma
(Article)
(103 Points)
Replied 27 July 2018
the entry should be in this year.
It will be allowed only in this year as per section 43B of Income Tax Act.
CAclubindia
