Accounting for renovation expenses for rented office premise

This query is : Resolved

Ananya Sachdeva (Querist)
Follow

14 June 2013 Hi, we have spent 2lakhs on tiles, wallpapers, paint and other renovation expenses for our office premises. we are paying 60000pm as rent for the office. I would like to know whether this expenditure for renovating would be capitalized, why or why not? and if yes then how?

Ankit

Ankit (Expert)
Follow

14 June 2013 I dont think this expense can be capitalised. It is revenue in nature because it is a sought of an upkeep.

it may be taken as capital exp., if major structural changes are made.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

14 June 2013 Supreme Court in the case of CIT vs. Madras Auto Services Pvt Ltd. [1998] 233 ITR 468 held that expenditure on wall papers, partition wall, marble flooring etc; is not in the nature of capital expenditure.

Message likes : 1 times

Ananya Sachdeva

Ananya Sachdeva (Querist)
Follow

14 June 2013 not exactly major changes are made, but yes a big amount is spend on the interiors of our office. if this amount is to be capitalized then should i consider it as addition to furniture and depreciate as furniture or some thing else?