Fixed Assets
This query is : Resolved
10 April 2009
Pl. give legal opinion for my confusion.
We are working in co-op. dairy and we purchase cans for milk receiving from village level dairy of Rs. 2500/- per can.
So, we can above items treat as capital assets or revenue exp.
Pl. give me legal advise.
We are working in co-op. dairy and we purchase cans for milk receiving from village level dairy of Rs. 2500/- per can.
So, we can above items treat as capital assets or revenue exp.
Pl. give me legal advise.
CA. B.SRINIVASULU
(Expert)
10 April 2009
There are three methods of accounting the transaction.
One method is since the value of each item is less ie 2500 you can directly write it off as expenditure.
Second method is since it will be used for 2 or 3 years, you can charge the regular rate of depreciation.
Third method is like stock method. Opening number of cans + purchases - closing cans the difference will be treated as expenditure for the year.
Depending on the size of the unit and administration possibilities you have to choose the depreciation method.
One method is since the value of each item is less ie 2500 you can directly write it off as expenditure.
Second method is since it will be used for 2 or 3 years, you can charge the regular rate of depreciation.
Third method is like stock method. Opening number of cans + purchases - closing cans the difference will be treated as expenditure for the year.
Depending on the size of the unit and administration possibilities you have to choose the depreciation method.
CA Nitin Wadhwani
(Expert)
10 April 2009
1st Method is not allowable as per income tax act.
As per Income Tax act they are capital assets to be depreciated at 15%(Machinery) in block of assets if their useful is more than 1 year.
As per your governing statute they should be treated as revenue or capital expenditure depending whether their expexted use is beyond 1 accounting period or not.
As per Income Tax act they are capital assets to be depreciated at 15%(Machinery) in block of assets if their useful is more than 1 year.
As per your governing statute they should be treated as revenue or capital expenditure depending whether their expexted use is beyond 1 accounting period or not.
10 April 2009
i support the experts
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST on reimbursement of expenses
- Query on effect of registration of property
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Wrong CMPo8 file
- Equity Share Sale and Purchase
- Additional trade name
- Whether output tax is taken credit by purchaser
- Visiting card purchase
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Number of years as per AS amortisation of Goodwill
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
