Capital Vs revenue expenditure
This query is : Resolved
04 June 2011
A Factory shed of the assessee was destroyed in fire. The assessee spent Rs 65000/- on rebuilding the factory shed.
Whether it is capital expenditure or Revenue expenditure.
Whether it is capital expenditure or Revenue expenditure.
04 June 2011
Under section 37 of Income Tax Act,1961, such expenditure shall be treated as revenue expenditure.
05 June 2011
If this is not a temporary shed then it will be capitalized
06 June 2011
This is a revenue expenditure as per general principles of accountancy and AS and sec 37 of I.T ACT as it only restore the benefits not enhance the previously assessed performance...
Sumat Singhal
Sumat Singhal
06 June 2011
I think this case is related to account and no role of section 37 for checking revenue and expenditure for accounting purpose.....however after destroying the structure for as on date of loss is there any entry passed or not for Loss of factory shed however loss entry should be passed on that date and also for making new shed it will be part of FAR and shall be capitalized
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