TaxTMI 
TaxTMI 
Pre-operative expenses
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....re-operative expenses<br> Query (Issue) Started By: - CHITRA RAGURAM Dated:- 15-12-2010 Last Reply Date:- 16-12-2010 Income Tax<br>Got 4 Replies<br>Income Tax<br>Whether the company can account the EB charges spent on testing as pre-operative expenses and w.off in subsequent 5 years. Reply By CA Rachit Agarwal: The Reply: Section 35D of the Income Tax Act, 1961 speaks about the preliminary expen....
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....ses to be written off in the five years. Preliminary and Pre-operative expenses are two different words. Pre-operative expenses can be capitalized to the assets to which it relates and depreciation can be claimed. Reply By rishi mohan: The Reply: Preliminary expeneses are the nature of fictitious assets. These are the expenses of the company before the incorporation of the company. These are tr....
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....ansferred to the profit and loss accounts and written off every year from the profits of the business. These expenses are shown on the assets of the balance sheet under the head misceallenous. Preliminary expenses shall be written of in five years u/s 35D. Pre operative expenses are of capital nature are to be capatalised with cost of fixed assets in relaions to which they have incurred. whereas ....
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....pre operative expenses are to be charged aganist profits in which year buisness has commenced. Reply By DEV KUMAR KOTHARI: The Reply: What exactly is EB charges- always give details of nature of expenses and the purpose. What for testing has taken place- plant and equipment or or processes or raw material or goods mfd. during trial run or some thing else? Reply By CHITRA RAGURAM: The Reply: The ....
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....EB expenses is incurred on production trial run<br> Discussion Forum - Knowledge Sharing ....