Revaluation

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2013
How to treat and record the expenses incurred for the transaction Revaluation of of land & building ? In financial statements ? What is the cardinal principal of taxation?

Hitendra Jain

Hitendra Jain (Expert)
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02 December 2013

I believe the query is somewhat whether any expenses related to revaluation will fall under the criteria of expense under tax laws.

If revaluation is made for getting finance or for any statutory compliance under law governing the entity then they will have room U/S 37.

If Revaluation is made to acquiring land and building then they will fall under the criteria of Capital Nature and by value of such expenses cost of assets shall be increased.

If Revaluation is made to get market value of the asset and asset has been sold during the same accounting period then they are expenses relating to sale of the asset and the deducted from Sale Consideration while computing Capital Gain.

if the expenses made only to revalue the asset for any further project plan etc. which have characteristic of Sec 35D
They can be deferred as per scheme of that section.