This expenditure will be allowed ?

1214 views 16 replies

The company paid professional fees to a CA firm to prepare valuation report with respect to valuation of equity shares.

Is this an allowable expenditure while total income computation under income from business

Please share your considered thoughts

Replies (16)

ACCORDING TO ME THE EXPENSE IS ALLOWED AS IT IS THE EXPENSE FOR THE COMPANY.

i have same opinion- it should be allowed

wait for more replies

The professional fee paid to a CA shal be 100% allowed as an expense to d co.no doubt abt dat.
Originally posted by : Aditya(future ca)

i have same opinion- it should be allowed

wait for more replies

 AGREED

Originally posted by : Palash
The professional fee paid to a CA shal be 100% allowed as an expense to d co.no doubt abt dat.

As per Sec. 37,.

Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession".

So as per my view it is to be allowed however I am also confused whether it is Capital in Nature???

Yes it should be allowed as it is expense of the company and

if TDS has been deducted if required then it will be 100% allowed.

Fees paid for valuation of equity share is revenue expenditure,allow u/s 37.

Tds has to be deducted ,if limit specified in sec 194J cross.

I agree with all above.

As per my opnion It is allowed and TDS to be made.

Fees paid as Professional Fee for valuation of equity share is revenue expenditure,allowed u/s 37.

Tds has to be deducted ,if limit specified in sec 194J cross.

yup

this exp. is fully allowed.......

and tds will be made.

ALLOWED..

I think we need to check the purpose of share valuation. If it is for deciding the price of further issue of shares, it will be capital expenditure and will not be allowed. If it is for deciding the price for bonus shares, it is revenue and will be allowed. Any other purpose also has to be tested whether it is capital or revenue expenditure.

I don't think there is any problem in allowiong such expense if TDS has been deducted and subject to applicability of limit specifies in sec 194j

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