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Revenue expenditure or capital expenditure

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Querist : Anonymous

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Querist : Anonymous (Querist)
20 April 2013 In FY 2011-12 one UPS purchased and installed at retail store and it is part of capital expenditure. Now repair required for the same which cost Rs.8000/- Pl suggest whether this repair cost will be treated as revenue expenditure or capital expenditure.
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CA CS PRASHANT

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CA CS PRASHANT (Expert)
21 April 2013 Dear Frnd,

If the repair increase the productivity of the UPS then it will definitely capitaliesed.

Since here there will be no increase in productivity and its only in the nature of repair to regain the original working condition the expenditure needs to charged to revenue.

That means its a revenue expenditure.
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
06 June 2013 It is revenue expenditure as you are not increasing the capacity of the UPS
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