accounting for repairs
This query is : Resolved
17 November 2008
Dear
Can anybody guide me that how accounting treatment to happen in this case :
A company has taken an office on rent. In one year it spends approx 12 Lac for repairs or renovation (such as flooring, AC ducting & Glass fittings etc non removable)of the office premises taken on rent.
As this is rented property, shall this comapny book the expenditure on repairs/ renovation as Capital assets or revenue expense for Income tax purposes.
Please clarify and if possible give certain judgements from case laws.
Can anybody guide me that how accounting treatment to happen in this case :
A company has taken an office on rent. In one year it spends approx 12 Lac for repairs or renovation (such as flooring, AC ducting & Glass fittings etc non removable)of the office premises taken on rent.
As this is rented property, shall this comapny book the expenditure on repairs/ renovation as Capital assets or revenue expense for Income tax purposes.
Please clarify and if possible give certain judgements from case laws.
17 November 2008
The said expenditure can be capitalized and depreciation can be claimed u/s 32.
17 November 2008
Continuing on the issue it is clear in explanation 1 to section 32(1) of the incometax act,1961. Thus no need to search for case laws.
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