Revenue or Capital expenditure ??

Expenditure on acquisition of Patent right debited to P/l account

..it will be disallowed while computing PGBP ??
Replies (5)
See Jaisika, When Any Assets (Tangible or Intangible) is purchased then there is a simple concept for it:

1. Any Expense it made before the Assets is Put to use ;

Shall be added to the Cost of Assets. Which means Actual Cost (if business Assets is purchase) and Depreciation would be allowed thereon / COA (when Investment assets are purchased)

2. Any Expense made thereafter; Would simply be considered as Revenue expense and transferred to P&L straight away.

Now Your Questions-

Expenditure on Patent right if debited to P&L account that WRONG and has to be Added to the Actual Cost u/s 43(1) and Depreciation shall be allowed on that.
Exp. on acquisition of patent debited to p/l
n assets is put to use in same Previous year

that means depreciation shall be allowable but in study mat. it is treated as revenue exp. n deduction is allowed computing pgbp

Please consider self generated assets and capitalisation of the same just like goodwill

Any assets can't be called self generated if any single penny or efforts has been spent toward it.

At Kukreja

Please give refrence of study material 

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