Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Taxation, Case Law Of Water Jet Ferries

tag 242 Download5 Pages 1,090 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT
Question: Give the Brief Business Description of Water Jet Ferries and Issue?   Answer: Brief Business Description of Water Jet Ferries and Issue  Water Jet Ferries is ferry operator in car and truck ferry services by water-jets powered by diesel engines. Company’s profitability is continually decreasing due rise in fuel cost and fall in patronage.  Continuous decrease in profit can make company out from market, for sustain in market company have make modification in their engines. Now Water Jet has decided to reduce cost by making repairs and modifications in engines. These repairs and modifications done for low consumption of fuels speedily travels of vessels and making eco-friendly engine i.e. technological advancement or up gradation. Engine Manufacture of the company advises to the company to make repairs and modifications in engines and treat it as revenue expenditure and claim deduction in under sec 25-10 of Income Tax Assessment Act 1997 for expenditure incurred on modification of engines.   Treatment of Cost of Repairs and Modification Continues of any assets requires day to day repairs or modifications of parts wholly or partially. Cost of day to day repairs generally includes cost of parts, consumable and labour etc. For an illustration, Owner of a car requires regular change or repairs of tires, lubricants, engine etc. When company incurs any expenditure on repair and modification of assets than expenditure should be charged according to nature of expenditure. Expenses are to be classified in two types, revenue expenditure and capital expenditure according to nature of expenses. Let us understand concept of Revenue expenditure, and capital expenditure.  Revenue Expenditure: - Revenue Expenditure is expenses incurred on maintaining assets and generating revenue. Revenue expenditure includes repair cost, maintains charges, repainting and renewal cost. Revenue nature expenses are related to the generation of Income.  Capital Expenditure: - Capital Expenditures are all expenses incurred on any assets to make it usable or expenses up to use. If any expenses incurred assets after put to use but results in efficiency and effective use of assets, i.e. without those expenses output from assets is not possible: should be capitalized and depreciate at appropriate rates.   Now it clarified that those expense to be considered as repairs which generates revenue, all other expenses incurred on modification or repairs of assets should be capitalized.  Repairs: - Repair means restoration, renovations, and modification of assets by renewal of defective parts, fixing loose parts and lubricating the parts. Repair includes restoration of something lost or damaged. Repair for the purpose of sec 25-10 of the Income Tax Assignment Act 1997 is renewal or replacement of parts to some modification and minor or incidental improvement. Repair involves modification of assets without changing its original nature and with little technological advancement.     Case Law: - In case W Thomas & Co v FC of T (1965) 115 CLR 58, W Thomas & Co incurred expenditure on repairs to guttering, roof, walls and two floor building and treated as revenue and claimed deduction under sec 36 of Income Tax Assessment Act 1936. In this case High Court considered as capital expenditure not repairs judgement was passed against the company stating that these expenses not of repairs but to be capitalized.  In Case of Jet Ferries, the company had incurred cost on modification of engines to results low fuel consumption, high speed vessel traveling and eco-friendly engines. Engine manufacturer suggests the company that all expenses incurred on modification by company able to treat as repairs and claim deduction in tax under sec 25-10 of Income Tax Assessment Act 1997. In this case there is greater degree of technological advancement and change in its character. If any non-capital modification work is not repair than it may deductible under Income Tax Assessment Act 1997.   No Deduction for ‘notional’ repairs When repair and modification work is totally capital expenditure than no amount is allowable as deduction under Sec 25-10 of Income Tax Assessment Act 1997 for these as these are notional repairs. When tax payer have two alternatives, one involving expenditure on r

Getting nightmare regarding pending chemistry assignment? Then it is high time you consider hiring chemistry assignment help service of We at deliver quality subject specific assistance on more than 100+ subjects. For us, students' need is foremost, and we work round the clock to offer science, humanities and commerce assignment help. Among Commerce wing, our one of the most popular services is capital budgeting assignment help. In science segment, we have gained popularity with biology assignment help.

Most Downloaded Sample Of Management

Toulin Method Of Argumentation

Download : 279 | Page : 1

You are required to write a researched argument essay that convinces persuades the reader of your position / stance. This is an academic, researched and referenced document that demonstrates your understanding of the objectives of the course. The structure of the argument will follow the TOULMIN METHOD of argumentation.

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Consumer Behavior Assignment

Download : 208 | Pages : 9

Executive Summary The purpose of this report is to elaborate the factors which are considered by individuals before selecting an occupation. Choosing an occupation is indeed a major decision of everyone’s life and it does give a shape to where he would be heading in the course if time. The report begins with a list of various occupations which have been going since the human civilization started though it has indeed changed its form to...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Internet Marketing Plan For River Island

Download : 369 | Pages : 13

Introduction With the increase enhancement in the field of technology, it has been considered essential by the businesses to implement such technology in their business processes. Further, the increasing demand from the customers regarding the better quality of products and services delivered to their doorstep has also necessitated for the businesses to implement the e-business strategy in their business processes. E-business which is common...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Strategic Role Of HR In Mergers & Acquisitions

Download : 330 | Pages : 9

Executive Summary In a merger & acquisition, role of an HR has emerged as a very critical function. At each stage of merger and acquisition process, HR plays a strategic role. The importance of role of HR part in integration of the merged companies should not be taken lightly and should be handled very carefully and with due planning. At pre acquisition stage, due diligence should be taken before the start of the process and HR must carve ou...

Read More arrow Tags: Australia Arlington Management University of New South Wales 

Relationship Between Knowledge Management, Organization Learning And HRM

Download : 360 | Pages : 7

Introduction In this competitive business environment where every business organization is trying to attract the customers of each other, it becomes essential for these organizations to remain competitive by innovating new ideas and thoughts, so that value added products and services can be provided to the customers. The motive of such organization in providing value added services to their customers, require their employees to be quite effect...

Read More arrow Tags: Australia Arlington Management University of New South Wales 
Free plagiarism check online Free plagiarism check online on mobile
Have any Query?