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deduction admissible from profit and gain from bussiness and

gunjan jain (student cs executive) (41 Points)

22 August 2010

hello

plz help me to solve this question.........

trvelling expenses of rs20000 incurred by a director on a tour to usa in connection wid negotiation of purchase of a new machinery is admissible for deduction while computing profits and gains from bussiness and profession. state wid reason

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5 Replies

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 23 August 2010

HI DEAR,

IT SHOULD BE CAPITALISED AS FROM MY POINT OF VIEW.

ANY AMOUNT INCURRED ON THE FIXED ASSET TILL IT IS INSTALLED SHOULD BE CAPITALISED AND DEPRECIATION SHOULD CHARGED ON THAT ONCE TTHE ASSET PUT TO USE.

REGARDS,

MANOJ

vkbothra (Learning ) (690 Points)
Replied 23 August 2010

Expenses before installation is considered as capital expenses. ;)

CMA Thiru (CA FINAL STUDENT) (378 Points)
Replied 23 August 2010

Yeah gunjan jain This Expenses is Allowable under Business Expenses...

This is not a Capital Expenses.... Because You Have a Purchase a Machinery and Meet the Relating Expenses are treated as CAPITAL EXPENSE (i.e., AFTER PURCHASE A MACHINERY and INCURED a Expenses for Travelling==This Expenses is Incured the Purpose of Machinery put in office So this are Capital)

Am Righttt....?????

Gokul Viswanath Shenoy (Company Secretary & Finance Manager) (430 Points)
Replied 23 August 2010

the expenses of travel to go to the usa for negotiating for the purchase of the fixed asset is an expense incurred for buying the asset..so it must be capitalised in to cost of purchase of the asset..so,the cost of travel becomes part of the cost of the asset..