Capitalisation of water charges

Capitalization generally depends on the future use and value. If the additional lines help to increase productivity in future and also if the value is significant, it is better to capitalize, provided the new lines are not replacement lines.

Thanks Poornima for the reply.

Yes, the amount is significant. Water will not directly increase the productivity.

The main issue as I assume is of ownership. The ownership of connection normally will be with water supply board. Can the capitalisation be questioned by auditors. Even I am in favour of capitalisation. 

Could you please give clarification on ownership aspect

It is paid to water supply board but on behalf of whom? You would be receiving receipt in your company name right? If so, it is your company's expenditure and hence I think it will be allowable