Just a moment...

Report
FeedbackReport
Bars
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
+ Post a Query
Post a New Query
Title :
0/200 char
Description :
Max 0 char
Category :
Delete Reply

Are you sure you want to delete your reply beginning with '' ?

Delete Issue

Are you sure you want to delete your Issue titled: '' ?

Discussion Forum

Back

All Issues

Advanced Search
Reset Filters
Search By:
Search by Text :
Press 'Enter' to add multiple search terms
Select Date:
FromTo
Category :
OR
Search by Issue ID:
NOTE: If you have inputs in both the fields, then results will be shown for issueId first.
Issue ID : 117372
- 0 -

Capitalization of Signages

Date 22 Jul 2021
Replies5 Answers
Views 7615 Views
Asked By

Our organisation is displaying signages in retail outlets and pays monthly rent to the retailers for the space provided. Can i capitalise the signages since these has a life of 3 years.

5 answers
Sort by

Old Query - New Comments are closed.

Hide
- 0
Replied on Jul 22, 2021
1.

Signage is not an immovable property -----held by Madras High Court in the case of VIRGO INDUSTRIES (ENGINEERS) PVT. LTD.Versus COMMR. OF C.EX., CHENNAI-II reported as 2015 (4) TMI 247 - MADRAS HIGH COURT. So no question of capital expenditure. It is revenue expenditure.

- 0
Replied on Jul 22, 2021
2.

Another judgment by Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Liberty Group Marketing Division 2008 (4) TMI 219 - PUNJAB AND HARYANA HIGH COURT. Relevant para as below:

13. Considering the above principle of law, in the present case, it is to be seen as to whether the expenditure incurred by the assessee on glow sign boards was with a view to bringing into existence an asset or an advantage for the enduring benefit of the business. In our opinion, the expenditure incurred by the assessee on glow sign boards does not bring into existence an asset or advantage for the enduring benefit of the business, which is attributable to the capital. The glow sign board is not an asset of permanent nature. It has a short life. The materials used in the glow sign boards decay with the effect of weather. Therefore, it requires frequent replacement. The Tribunal has also recorded a finding that the assessee has to incur expenditure on glow sign boards regularly in almost each year. This fact itself shows that the advantage accrued from the use of the glow sign boards is not of enduring nature. Thus, the expenditure by the assessee on these glow sign boards did not bring into existence any asset or advantage for the enduring benefit of the business. The assessee has spent the expenditure on the glow sign boards with an object to facilitate the business operation and not with an object to acquire asset of enduring nature. Therefore, the said expenditure was of revenue nature and the Tribunal has rightly treated the same as of revenue nature.

- 0
Replied on Jul 22, 2021
3.

You cannot capitalize.

- 0
Replied on Jul 23, 2021
4.

Thanks for the reply, still would like to ask for further clarification.

How this will be treated in IND AS and as per Companies Act 2013.

- 0
Replied on Jul 25, 2021
5.

Q. How this will be treated in IND AS and as per Companies Act 2013 ?

This is the field of Dr.Govindarajan, Sir.

I humbly request Dr.Govindarajan, Sir to reply this question for enrichment of my knowledge.

Old Query - New Comments are closed.

Hide
Recent Issues