Respected all Members,
A Company is providing speed boats to Govt. on hire basis. The co. has purchased 2 engines from Dubai from a party on which custom duty is levid [bill dated 20/11/2011 In (U.S. $) say $60,000, market rate $1= Rs.50.00]. The Company made the payment on 15/12/2011 at the rate prevailed in the market. (say $1= Rs.52.50). Custom rate $1= Rs.51.00
Kindly throw the light on the following
What amount to be capitalized-
a. Amount prevailing on the bill date
b. Custom rate
c. Payment date
Kindly explain your answers considering the effect of the same for income tax purpose.
CAclubindia
