Income Tax Act Article 45

Actual cost means the price paid for the acquisition of an asset and includes not only the purchase price paid at the time of acquisition but also all necessary expenses incidental to acquisition or incurred in making it fit for use in the operation of business. Where an asset is manufactured or constructed instead of purchased, the cost includes materials, labor and all expenses incurred in the designing, manufacturing, construction and installation necessary to make it fit for use in the operation of business. In the case of an asset brought forward at the beginning of a period, the cost means the original inventory price.The expenses incurred in the expansion, replacement, improvement, or repair of any asset as a result of which the asset’s value or efficiency is increased may, to the extent of such increase, be added to the balance of the actual cost for computation.