can we record capital goods as expenses in P&L a/c ???

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Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2010 we are in textile sector. we purchased designs and treated this expenses as revenue expenses but the modvat credit on designs are taken 50 % in current year and remaining in next year. can excise department disallow this credit as capital goods are recorded as expenses and not capitalised in B/s.
As we not paying excise on output but want to avail credit on capital goods under notification.

thanks

CA Sanat Pyne

CA Sanat Pyne (Expert)
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31 July 2010 No there is no problem.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2010 In the sequence of above question, will there be any problem at the time of excise audit??

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CA Sanat Pyne

CA Sanat Pyne (Expert)
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31 July 2010 in excise there is no problem but in income tax you may face some problem due to capital expendituretreated as revenue exp.

It is totalluy depends how u produce the matter before the ito.