| COURT: | ITAT Mumbai |
| CORAM: | Joginder Singh (JM), Sanjay Arora (AM) |
| SECTION(S): | 145, 30, 31 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | allocation of common expenditure, capital vs. revenue expenditure, repairs |
| COUNSEL: | Awdhesh Kumar |
| DATE: | February 4, 2015 (Date of pronouncement) |
| DATE: | February 9, 2015 (Date of publication) |
| AY: | 2009-10 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Expenditure towards repair and renovation of leased premises is capital in nature. Method for allocation of common expenses to different WIP projects of a builder explained | |
The assessee being a builder and developer, Accounting Standard 7 (AS-7), issued by the ICAI, titled, ‘Construction Contracts’, would not apply, so that the prescription of AS-9 and AS-2, based on general principles that govern any business, would apply for the revenue recognition and inventory valuation respectively. Only costs incurred toward a particular project, or otherwise related to construction activity, would stand to be allocated and, thus, capitalized as a part of the project cost
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