Rs. 100,000 spent by a factory in overhauling of its existing plant & machinery. It has enhanced its working life by five years. The aforesaid expenditure is:

An expenditure is classified as Capital Expenditure if it meets any of the following accounting criteria: 1. Increases Earning Capacity or Efficiency: It significantly improves or enhances the operational efficiency, productivity, or revenue-generating capacity of an existing asset. 2. Extends Useful Life: Major repair, overhaul, or modification work that extends the working life of a plant, machinery, or asset beyond its original estimated life. 3. Enduring Benefit: The economic benefits of the expenditure extend beyond the current accounting/financial year (in this case, an additional 5 years).