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Capital or revenue exp

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Saurabh Toshniwal

ca final

2363 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.

Replies (3)

Quick Summary

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.

RAJA P M

"Do the Right Thing...!!!"

128157 Points Posted on 21 January 2020

The DG set is a capital nature...

Kapadia Pravin

17269 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.