CLU CHARGES WHETHER REVENUE OR CAPITAL EXPENDITURE

[satbir singhwahi]

Sir

CLU charges paid by Company, of the land owned by Director. On that land Workshop constructed by Company and used for business purposes.Whether these CLU charges paid are Revenue or need to be Capitalised in building account.

PLs Guide.

[DR.MARIAPPAN GOVINDARAJAN]

Please give the meaning of CLU charges.

[satbir singhwahi]

Change land use CLU : Amount paid to state govt for change of land from agriculture to industrial

AI Summary

Change of land use charges may be classified as revenue or capital depending on their nexus to asset creation. Whether payments for change of land use (CLU) made to convert land from agricultural to industrial, paid by a company for director owned land on which the company constructed and used a workshop, are to be treated as revenue expenditure or must be capitalised in the building account; analysis depends on the nexus between the CLU payment and creation or improvement of the long lived business asset.