ITC claimed on expenses used for furtherance of Business

[Shambhavi Nayak]

We during 21-22 had expenses like office renovation. Extension of storage, roofing of godown and some computers Name board and weighment cabin.

None of the above items was capitalized and ITC were claimed as all the expenses were related to furtherance of business.

Order passed to reverse the said ITC claimed as it was not declared as Capital Goods.

 

AI Summary

Input tax credit admissibility depends on nature of supplies, not capitalization; item-wise analysis required for construction-related exclusions.
Availability of Input Tax Credit depends on statutory conditions and the nature and use of supplies, not on capitalization alone. The construction/works-contract restriction disallows ITC only to the extent expenditure is capitalised; therefore capitalization matters only for that specific bar. Item-wise analysis is required: movable items like computers and detachable nameboards typically qualify, while civil works such as roofing or storage extensions may be excluded if they amount to immovable property and are capitalised. Blanket reversals based solely on non-capitalization are legally unsound.