Capital or revenue exp

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ca final
1422 Points Posted on 21 January 2020

we have purchased a dg set of rs 50 lakhs which is a part of big machine. this dg set can be used only with the machine and not without the machine, its a part of machine.

whether it will be capital expenditure or revenue expenditure. kindly share supreme court judgement, if any.

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On 21 January 2020 at 16:20 Report
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This discussion clarifies whether a DG set purchased for Rs 50 lakhs, which is integral to a larger machine and cannot function independently, should be treated as capital or revenue expenditure. The consensus is that the DG set is a capital asset, falling under fixed assets (Plant & Machinery), and therefore qualifies for annual depreciation claims.

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"Do the Right Thing...!!!"
77792 Points Posted on 21 January 2020
The DG set is a capital nature...
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On 21 January 2020 at 17:33
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10683 Points Posted on 22 January 2020
DG set itself is a machine (fixed assets) under Plant & Machinery.

It's a capital expenditure and on which you are entitled to claim depreciation every year.
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On 22 January 2020 at 23:44
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Profession
19978 Points Posted on 27 January 2020
DG IS A capital asset .
It should be booked under Fixed Asset.
To get a more concise idea refer
Schedule 111 OF COMPANIES ACT.
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On 27 January 2020 at 06:50

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