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Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2014 suppose in a new co.for machine installation foreigners came for setting the machine and they stay in hotel so hotel expenses are capitalise or not ? one thing it is a new company.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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05 April 2014 Hotel expenses would be capitalized.
.
The Concept :
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If the installation of the machinery was not required; the expenditure was also not required to incur.
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It means the expenditure is related to the machinery....not to run the business...hence it is a capital expenditure.

Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2014 ok sir but if some one is appointing for whole co as a observer then what is the treatment for hotel expens?

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CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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05 April 2014 The expenses related to supervision are also part of installation of the machinery hence these would also be capitalized.

Querist : Anonymous

Querist : Anonymous (Querist)

05 April 2014 ok sir thank u for your guidance