banner_ad

Pre operative expenses

This query is : Resolved 
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
07 October 2011 An company has installed an plant in the nov11 but hav not started its operation yet. The plant is ready to be used. The company has capitalised all the expenses in past till as on date as an preoperative expenses. Is company proper in doing so?? Can we claim depreciaton on the same? What would be the Income Tax implication??
Profile Image

CA Chitresh Gupta

Profile Image

CA Chitresh Gupta (Expert)
07 October 2011 Only the pre-operative expenses incurred by the company upto the plant is ready for its intended use (actal usage is irrelevent) can be capitalised along with the Plant Cost. All the further expenses till the till the plant is actually put into operation is to be charged off to the revenue.

In the Income Tax Act, there is no concept of pre-operative expenses, these has to be claimed as expenditure provided there is no benefit of enduring nature is derived from the expenses.

Hope this clarifies the matter.

Regards
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
ARTICLESHIP 17 May 2026
CA Article /Trainee

Malik Sunil & co

New Delhi

CA Foundation

View Details
Company
29 May 2026
Company Secretary - Part time

Shaswat initial support private limited

Ahmedabad

CS

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
14 May 2026
Financial Analyst - Remote Finance Expert

HiringBridge

Ahmedabad

CA

View Details
Company
14 May 2026
Senior Associate

ABHISHEK SHANKAR AGARWAL & ASSOCIATES

Kolkata

CA

View Details
Company
24 May 2026
Accounts & Tax Executive

PARAS KHURANA AND CO

New Delhi

B.Com

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
19 May 2026
Article, CA & Paid Assistant Positions

Aggarwal Sarawagi and Co

New Delhi

CA

View Details