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Discussion > Income Tax > Others >

Whether capital expenditure or not????

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Practicing Chartered Accountant

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Posted On 31 August 2013 at 12:24 Report Abuse

Whether the following expenditures should be treated as capital expenditure ?????

1- Cost of dismantling a building in case a new building is to be constructed on the land.

2- Legal expenses incurred to defend a suit related to title of patent. The suit has been lost.

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C.A. B.Com (H) Graduate

[ Scorecard : 2090]
Posted On 31 August 2013 at 13:27

Dear Nitin sir,

both are revenue expenditure... not capital expenditure...

Because:- If the subsequent expenditure increases the expected future benefits from the asset beyond its pre-assessed standard of performance then as per AS – 10 it should be capitalized. Otherwise it should be expensed.


Best Regards,
CA Lovely Arora
ca.lovelyarora @

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