Capitalisation of plant and machinery

1. For erection of Plant and machinery, civil work is done inside factory building. Whether it will be capitalized in Plant and machinery or in Factory Building?

 

2. A company wants expand a Unit. For Expansion of such Unit, Certain expenses have been incurred. These expenses are treated as Pre operative expenses in the books. Now, Govt brings out a policy which specifically says that this kind of Unit cannot be installed. Now, How these pre operative expenses will be dealt in the books of accounts?

 

Please reply soon for both questions separately with reasons. 

Replies (3)

IF NEW STRUCTURE IS CREATE WHAICH IS BIG AMT THEN CAPITALISED OTHERTWISE TRANSFER TO REPAIR TO MAINTAINACE

 

COMPANY IS ALREADY OPRATIVE ,IF EXPANSION FOR NEW PRODUCT THEN IT CAN BE TRANSFER TO PRE-OPRATIVE EXPENSES

IF EXISTING PRODUCT NOT NEW PRODUCT THEN CANNOT TRANSFER TO PRE OPRATIVE

For erection of plant and machinery any civil work done for this erection has been capitalised to plant and machinery only .

any expenses made for set up of a new unit can be deductible as expenses in the books of account. from the starting of the unit till the government notification all expenses made shall be allowed as deduction in the particular year only.

can we claim GST ITC on the civil works done to erect the machinery?

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