Capital Vs revenue expenditure

This query is : Resolved

NARESH KUMAR SHARMA (Querist)
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04 June 2011 A Factory shed of the assessee was destroyed in fire. The assessee spent Rs 65000/- on rebuilding the factory shed.

Whether it is capital expenditure or Revenue expenditure.

prasad

prasad (Expert)
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04 June 2011 Under section 37 of Income Tax Act,1961, such expenditure shall be treated as revenue expenditure.

Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)
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05 June 2011 If this is not a temporary shed then it will be capitalized

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CA Sumat Singhal

CA Sumat Singhal (Expert)
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06 June 2011 This is a revenue expenditure as per general principles of accountancy and AS and sec 37 of I.T ACT as it only restore the benefits not enhance the previously assessed performance...
Sumat Singhal

Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)
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06 June 2011 I think this case is related to account and no role of section 37 for checking revenue and expenditure for accounting purpose.....however after destroying the structure for as on date of loss is there any entry passed or not for Loss of factory shed however loss entry should be passed on that date and also for making new shed it will be part of FAR and shall be capitalized