CA Faraz Ahmed (In service) (170 Points)
14 January 2013Hi Friends can anybody guide me whether the following expenses will be treated as Capital or Revenue?
1) Fees paid to ROC for registration
2)Feasibility and market study exp incurred by the co.
3)Factory site preparation
4)Registration fees for 100% EOU
Thanks n advance frndz
Nikky
(Student)
(149 Points)
Replied 14 January 2013
according to me all 4 are examples of preliminary expenses and hence deferred revenue expenses
CA Faraz Ahmed
(In service)
(170 Points)
Replied 14 January 2013
Are these allowable u/s 35D of IT Act?
Nikky
(Student)
(149 Points)
Replied 14 January 2013
but in case of feasibility and factory site preparation it is allowable if incurred by assessee himself or any other approved person
Back in the Game
(a)
(1273 Points)
Replied 14 January 2013
They are restricted to 5 % of the project isnt it?
Nikky
(Student)
(149 Points)
Replied 14 January 2013
yes deduction for corporate is 1/5 * lower of {eligible expenses & [ higher of 5% of cost of project & 5% of capital employed]} and for non-corporate 1/5 * lower of eligible expenses & 5% of cost of project
pawan tewari
( )
(544 Points)
Replied 15 January 2013
you can keep it as wip till the projects are ready and u gt registration numbers .once the formalities are over ,write it off n p&l a/c.
what others are saying is as per IT act. While accounting we are not concen with it
Nikky
(Student)
(149 Points)
Replied 15 January 2013
As per accounting point of view Deferred revenue expenses are to be shown as assets under the head misc exp and written off evry year
IMAM
(ARTICLE ASST.)
(371 Points)
Replied 15 January 2013
YES MISS NIKKY IS RIGHT AS PER PRESENTATION OF BALANCE SHEET ITEMS DEFFERED EXP SHOULD BE SHOW IN MISC EXPENDITURE HEAD IN BALANCE SHEET
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CAclubindia
