Cash payment above 10000 applicable on capital expenditure

This query is : Resolved

Rakesh Sharma (Querist)
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01 April 2017 We have purchased the below assets :-
1) old machine in cash of rs. 125000 and paid 12100 for its installation.
2) old car in cash for rs. 150000 and paid rs. 14000 for repairing in cash and 11500 for insurance in cash.

My queries are that can we capitalise the above assets and debit the expenses which incurred on above. Also can we claim depreciation on the above assets.

Please guide me.

Rakesh sharma

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay

(Expert)
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03 April 2017 The installation charges is required to be capitalized as without installation, the machine cannot be "put to use". In the second case, if the repair is required for the machine to bring it to the working condition, it has to be capitalized. If you capitalize asset, depreciation can be claimed.