CAPITAL EXPENDTIURE

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 May 2011 WHETHER IN REAL ESTATE BUSINESS PURCHASE OF STEEL & BEAM CAN BE TREATED AS FIXED ASSETS OR NOT?

WHETHER THE SAME EXPENDITURE IS CAPITAL EXPENDITURE SPENDING CASH MORE THAN 20000/-ATTRACT SECTION 40A(3)?

Kaushal Jha

Kaushal Jha (Expert)
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06 May 2011 If Purchase of steel and beam by a real estate co. is for construction of property to be sold, then it is raw materials. If the said beam and steel is to be used for construction of property to be used as its own office/residence, only then it can be treated as part of capital work in progress to be transferred subsequently to fixed assets on completion.

cash payment made for capital goods is not covered u/s 40A(3)