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Accounting treatment of construction of building when the land is not ours
Dear Expert,
My client have an office in bangalore on first floor of his father-in-laws house. The expenses to construct the office is borne by my client where as the building is owned by his father- in-law. how treat this expenses in our accounts.
Pls help me.
Thanks in advance.
Replies (4)
What are the terms based on which father in law has given permision to use first floor, specifically time period?
thank you reply sir,
its say about 15-20 years.
thanks in advance for the reply.
happy dewali
its say about 15-20 years.
thanks in advance for the reply.
happy dewali
Please note that : "A perusal of section 27(iiib) and 269UA(1) leave no room for any doubt where the period of lease is more than 12 years the lessee is deemed to be the owner of the property for the purpose of assessment under the provisions of the I-T Act."
Thus you may capitallize the expenditures under fixed assets.
Thanks a lot
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