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Accounting treatment for compensation paid

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nilesh mehta

nilesh mehta (Querist)
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02 October 2019 There was a long drawn dispute with respect to the getting possession of structure build on the land own by a landlord. Landlord claiming the possession whereas tenant asking compensation for the vacating the same. Out of court settlement arrived at and the compensation paid by Landlord to tenant.
Question is Compensation paid to be treated as Capital Expenditure or Revenue Expenditure in Books of Landlord?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 October 2019 Compensation paid is to be treated as Capital Expenditure.

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