Fixed Assets
This query is : Resolved
10 April 2009
Pl. give legal opinion for my confusion.
We are working in co-op. dairy and we purchase cans for milk receiving from village level dairy of Rs. 2500/- per can.
So, we can above items treat as capital assets or revenue exp.
Pl. give me legal advise.
We are working in co-op. dairy and we purchase cans for milk receiving from village level dairy of Rs. 2500/- per can.
So, we can above items treat as capital assets or revenue exp.
Pl. give me legal advise.
10 April 2009
There are three methods of accounting the transaction.
One method is since the value of each item is less ie 2500 you can directly write it off as expenditure.
Second method is since it will be used for 2 or 3 years, you can charge the regular rate of depreciation.
Third method is like stock method. Opening number of cans + purchases - closing cans the difference will be treated as expenditure for the year.
Depending on the size of the unit and administration possibilities you have to choose the depreciation method.
One method is since the value of each item is less ie 2500 you can directly write it off as expenditure.
Second method is since it will be used for 2 or 3 years, you can charge the regular rate of depreciation.
Third method is like stock method. Opening number of cans + purchases - closing cans the difference will be treated as expenditure for the year.
Depending on the size of the unit and administration possibilities you have to choose the depreciation method.
10 April 2009
1st Method is not allowable as per income tax act.
As per Income Tax act they are capital assets to be depreciated at 15%(Machinery) in block of assets if their useful is more than 1 year.
As per your governing statute they should be treated as revenue or capital expenditure depending whether their expexted use is beyond 1 accounting period or not.
As per Income Tax act they are capital assets to be depreciated at 15%(Machinery) in block of assets if their useful is more than 1 year.
As per your governing statute they should be treated as revenue or capital expenditure depending whether their expexted use is beyond 1 accounting period or not.
10 April 2009
i support the experts
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Tds on building rent monthly
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- RCM INVOICING FROM NOV-2024
- Confusion around Form 26QB fields
- REGARDING ACCOUNTING CODE FOR SERVICE TAX PAYMENT
- Redevolpment of bldg in mumbai
- Refund of AY 22-23
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
