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Construction of wall

Ajay Kumar (CA) (279 Points)

23 January 2013

Construction of vaastu wall inside factory premises. Should it be expensed off or capitalised? Is there any case law for this?

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4 Replies

Parimel (Administration) (41 Points)
Replied 23 January 2013

if it is of enduring benefit, it requires to be capitalized.

Ajay Kumar (CA) (279 Points)
Replied 24 January 2013

But one of the conditions for claiming depreciation u/s 32 is that asset should be used in business or profession. In what way a vaasthu wall can be justified as used in manufacturing of a product?

CA Sankalp Patwa (CA) (193 Points)
Replied 24 January 2013

Dear Ajay,

Section 32 specifies that asset should be used for purposes of business or profession.

It will give an enduring benefit and thats why should be capitalised.

Further purpose of business or profession is not limited to manufacturing activities.

Vaastu is a congenial setting of infrastructure facilities and it helps to work or live in a more scientific way.Thus, you are creating a good atmosphere for your employees by way of such activity. This justifies that this expenses are incurred for business purposes only.

No offense to other replies.

2 Like

Parimel (Administration) (41 Points)
Replied 24 January 2013

Mr. patwa is right on the dot. A holistic approach is required to taken in such cirumstances. The said construction goes on to provide better atmosphere for working, albeit in a non-tangible way, but nevertheless, a HR(human resources) tool. The same applies for acceptable expenses debited in the P&L a/c, like pooja expenses including ayudha pooja expenses.