Jewellery Design Charges are revenue in nature

[Kamal Agarwal]

The assessee is a in the business of manufacturing of Jewellery. The charges paid for the designing of the jewellery were held as Capital Expenditure so disallowed. Whereas, the assessee is in the business, where designing of the product kept changing very frequently. No enduring nature of the expenses of the assessee, nor any asset is came into being

[Ganeshan Kalyani]

It is a revenue expenditure.

[DR.MARIAPPAN GOVINDARAJAN]

Jewelly is not a capital to the assessee. The jewels are to be sold to the ultimate consumers. Therefore the charges paid for the designing of the jewellery are only revenue expenditure.

AI Summary

Jewellery Design Costs: Capital vs. Revenue Expenditure Debate for Manufacturers; Frequent Changes Suggest Operational Expense The discussion involves a query about whether jewellery design charges should be classified as capital or revenue expenditure for a business engaged in jewellery manufacturing. The initial classification as capital expenditure was contested because the design changes frequently and does not result in a lasting asset. Two replies argue that the charges are revenue in nature, as the jewellery is intended for sale to consumers, and thus, the design costs should be considered operational expenses rather than capital investments.