Sorabh Gupta (Manager ( Taxation )) (877 Points)
04 July 2009Dear All
Tel me one thing.............
If we purchase a land of Rs. 10Cr. And after purchase of land , we incurr expenses on some land filling work on all over land so that land filling cost are included in COST OF LAND or some thing else....................
Regards
Sorabh Gupta
niket
(Articled Assistant)
(63 Points)
Replied 04 July 2009
It is assume that after incurring expenses on land for filling work on all over the land the earning capacity of land increases, so the expenses incurred is capital expenditure. Also, all cost which are incurred on asset before the asset is put to use should be capitalised, hence the same expenses should be included in cost of land.
Riyaz Khan
(CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.)
(1315 Points)
Replied 04 July 2009
Yes, it would be treated as cost of Improvement of Land for Capital Gain Purposes...
CAclubindia
