Capital or revenue expenditure

Sanjeev Parasrampuria (B.Com CA Final CS Final)   (273 Points)

28 November 2012  


Payment of Rs.60000 as compensation for cancillation of a contract for the purchase of machinery with a view to avoid an unnecessary expenditure.
   1.Whether it is Capital or Revenue expenditure?
   2.If Capital Expenditure then what is treatement for the same?