my client entered into agreement in FY 17-18 for construction and expense incurred which was capitalised now client abandoned the contract .
now can I transfer all capitalised amount to profit and loss account
please refer section or judgment too if possible
thank you
Menu
Allowability of exp on contract assets abandoned
Replies (4)
Hi - just because project is abandoned does not mean that nature of expense should change from capital to revenue. also, your client would have started claiming depreciation. there are many case laws on abandoned projects including by SC which says that intent of expense is important rather than abandonment. not sure if accounting treatment would allow you to shift the expense to revenue. my suggestion is to keep claiming depreciation.
The entire cost incurred on assets has to be capitalized.
No depreciation claimed...no question of capitalization when assets abandoned...earlier it was shown as wip
CAPITAL WIP
CONSTRUCTION CONTRACT.
CONSTRUCTION CONTRACT.
Recent Threads
- Paying Rent in Cash: This Could Trigger an Income
- Market Down, Portfolio Down: Need suggestions for
- How much tax is payable If I withdraw my mutual fu
- GST Penalty Provisions under Section 73 vs Section
- How VFA Academy Helps Traders Build Discipline and
- GSTR-3B Relationship
- Section 194T: TDS on Payments to Partners: Applica
- Tax planning with HUF
- FCN ( Financial Credit Notes) Treatement in Books
- Indemnity bond notarization for Income Tax (NRI ou
Related Threads
CAclubindia
