Exchange difference on plant and machinery
This query is : Resolved
Akhilesh Somani
(Querist)
14 October 2013
A company import Plant and machinery. Company had paid advance to Supplier @ 55 per dollar on 12-05-12. P&M received and installed on 01-01-13 and that day Rate were Rs 60 per dollar. In this transaction any Exchange difference will arise . If yes than what is treatment in income tax.
14 October 2013
Hi Akhilesh,
Foreign exchange difference treatment will accounted in the books of account only when you purchase the asset on credit basis.In your case amount already paid in advance,so accordingly there wont any treatment for exchange difference.
Foreign exchange difference treatment will accounted in the books of account only when you purchase the asset on credit basis.In your case amount already paid in advance,so accordingly there wont any treatment for exchange difference.
Akhilesh Somani
(Querist)
14 October 2013
Would there be any implication of sec 43 A??
Prakash Tolani
(Expert)
15 October 2013
IT WILL BE CAPITALISED
Akhilesh Somani
(Querist)
15 October 2013
Mr prakesh, your means that will be capitalized on 60?
Akhilesh Somani
(Querist)
15 October 2013
please Mr Prakash Tolani confirm me .
Prakash Tolani
(Expert)
15 October 2013
Mr Somani
If you paid in advance all the amount then that paid amount will be capitalised.
If partly paid in advance and partly after delivery of goods then exchange difference will also be capitalised.
If you paid in advance all the amount then that paid amount will be capitalised.
If partly paid in advance and partly after delivery of goods then exchange difference will also be capitalised.
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