Capitalisation of improvements made in leased building

This query is : Resolved

CA SAJANA (Querist)
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10 May 2014 Dear Sir,

Please give your valuable advise on whether a lessee company can capitalise and claim depreciation on the improvements made on a leased building...

The nature of Lease is operational lease and the lessee company had incurred expenditure from plastering work to office furnishing

Thanks in advance

Sajana

Ravindra Srinivasa

Ravindra Srinivasa (Expert)
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12 May 2014 Lessee company can not capitalise the plastering expenses since the building belong to lessor company. Lessee company can claim it as expenditure and debit to Profit and Loss account.