First insurance Premium

This query is : Resolved

Rahul (Querist)
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28 December 2009 First Insurance premium paid on purchase of a car by an assessee is revenue expense as per Sec. 31 or Capital expense as it is an expense before the car is put to use(Practically no car can get out of the showroom without insurance)??

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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28 December 2009 It is capital in nature

ANIL JANGID

ANIL JANGID (Expert)
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28 December 2009 yes

Rahul

Rahul (Querist)
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28 December 2009 But sir doesnt specific provision prevail over a general one? Sec 31 is a specific provision for ANY Insurance Premium paid to mitigate the risk or damage to Plant & Machinery??

Rahul

Rahul (Querist)
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28 December 2009 But sir doesnt specific provision prevail over a general one? Sec 31 is a specific provision for ANY Insurance Premium paid to mitigate the risk or damage to Plant & Machinery??

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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28 December 2009 You can capitalise first insurance premium.

Arjuna Raina

Arjuna Raina (Expert)
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28 December 2009 capital expenditure.

Rahul

Rahul (Querist)
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28 December 2009 Thanks a lot Mr. Arjuna & Mr. Tilak.

CA Mani

CA Mani (Expert)
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28 December 2009 First premium will be capitalised because it is incurred before putting into use and any other subsequent premium will be expensed as per sec 31

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