It is not necessary that all capital expenditures must be capitalised, i.e. depreciated as part of cost of (i.e. value addition to) fixed assets for tax proposes. Certain of the proposed expenditures may be "expended", i.e. treated as revenue expenditure relevant for the respective accounting year; and the tax effects will be as immediate tax savings: It is generally felt by many personnel that these mediated tax savings, in view of the time value of money, are more valuable than corresponding tax savings distributed over the tax-life of the asset resulting from the expenditures (and depreciating in hither years).
Expenditure in normal overhaul, normal maintenance and repairs and relocation of equipment, to the extent that they do not increase the productivity or efficiency or life of the equipment can be expenses rather than be viewed as capital expenditure which must be depreciated. However, the underlying opinion entertained in these matters - whether to capitalise or to expense - cannot be rigidly formulated or guided.
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