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Expenses on Relocation of Machinery

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(Querist)
21 September 2007 Sir,

We have shifted Old Machinery from our Bahdurgarh (Haryana) unit to Banglore Factory an amount of Rs.9 Lac and paid Freight Rs.30000/-, which we were paid entry tax. Further we have paid Rs.60000 on installation/make of foundation.

I would like to know that can we capitalised these expenses or not.

Pls advise us the treatment of expenses.

Regards


Baljinder
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CMA Gul S

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CMA Gul S (Expert)
21 September 2007 Hello Mr Baljinder,

You cannot treat these as Expenses. This is to be added to the value of the Capital cost
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CA. Dashrath Maheshwari

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CA. Dashrath Maheshwari (Expert)
21 September 2007 Dear Mr. Baljinder Singh,
In my opinion you should capitalize the expenses because both the works has saperate legal entity and registrations like excise and sales tax etc.
Afterall company is same but you should treat them as a saperate branches and do accordingly.
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