10 September 2014
please advice Whether the cost of land is entitle to depreciation under schedule of Income tax act along with the cost of the building which is purchase in one agreement of sale/purchase. and also agreement of the purchase doesn't indicate the separate value of land and building.
11 September 2014
Income tax act of 1961 not provide the depreciation on land . Building eligible for depreciation if used for business according to income tax act.
Your query is that one agreement which not contain the split figure for the land and building . So you have to take valuer report which indicate the building value and land value separably. Same can be incorporated into your financial statement for depreciation purpose.
11 September 2014
Hi There is some judgment of high court and supreme court (like commissioner of income tax Vs Alps ind ltd. and joint commissioner of income tax Vs Rajesh exports ltd.) in which it is clearly indicated that if value cannot segregated or not clearly mentioned in purchase/sales agreement then depreciation will be allowed on whole value of building.
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