Expenditure Revenue Vs Capital

[Guest]

Whether amount paid for plan approval of the building is to be capitalised or to be treated as revenue expenditure.

[CA Rachit Agarwal]

Construction of building includes the planning stage as the first stage and the expenditure for the said purpose should be capitalized.

[CASeetharaman KC]

This definitely needs to be capitalised, as you may be aware that even expenses like transportation upto site is to be capitalised, then there is no problem in capitalising this expense as it is incurred for the creation of the asset itself

AI Summary

Capitalisation of planning costs: plan approval fees form part of building construction cost and are capitalised. Fees for building plan approval and similar planning-stage expenditures are integral to creating the building and should be treated as capital expenditure, forming part of the cost of the capital asset, analogous to other site and transportation costs capitalised to bring the asset to its intended use.