TaxTMI 
TaxTMI 
In income tax preoperative exp. can either be capitallsed to fixed asset and claimed as depreciation, or claimed as deduction in the year in which business commences.
A Company capitalised pre operative exp. under the head Miscellaneous expnditure and did not claim anything in ITR for many years. Now when the matter came to notice, can the co. claim full deduction of such exp. in current year?
Pre operative exp.
13 Dec 2012 
1 Reply 
1307 Views Asked by
Pre-operative expense treatment: capitalization versus immediate deduction, and whether prior capitalization bars a current-year full deduction.
Pre-operative expenses may be capitalised and recovered by depreciation or claimed as a deduction in the year business commences. The document asks whether a company that previously capitalised such expenses as "Miscellaneous expenditure" and did not claim deductions earlier can now claim full deduction in the current year. (AI Summary)
Pre-operative expenses may be capitalised and recovered by depreciation or claimed as a deduction in the year business commences. The document asks whether a company that previously capitalised such expenses as "Miscellaneous expenditure" and did not claim deductions earlier can now claim full deduction in the current year. (AI Summary)
