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Capital or revenue expenditure

A/c entries 438 views 1 replies

Sonia M Ketkar

B.com CA DISA(ICA) Pursuing CS

625 Points Joined June 2008

The client is into construction business. One PWD Old pipeline is passing below the land of the constructor. Unless the pipeline is shifted construction is not possible. After requesting, PWD agree to shift the pipeline but at the cost of the constructor. Is the cost of shifting Revenue or Capital Expenditure??? Can this cost be recovered from PWD????

Thanks in advance

Replies (1)

CA Saroj Kumar

Keen to learn something new every moment

2588 Points Joined June 2010

the shifting cost would be capital expenduture and the cost which incured for shifting i think its not be recoverable bcs PWD does not required shifting they r agree just bcz of ur could not be possible if they do not do that. rather then u claim the same as capital exp. bcs its relate to ur main area of function suppose if any stone come into way of construction then what u will do ..u will remove this at ur construction unless or otherwise compensation clause is in contract agreement.same as is pipeline. hence the cost would be capax.