CAPITAL GAINS AND DEPRECIATION
This query is : Resolved
28 February 2009
PVT LTD COMPANY SOLD DEPRECIABLE ASSET-RESIDENTIAL BUILDING
NOW PURCHASING RESIDENTIAL BUILDING WITH LAND AT COMPOSITE VALUE.
BUILDING IS GROUND FLOOR+1ST FLOOR PLUS SOME LAND APPURTENANT.
WILL FULL VALUE OF PURCHASE BE ADMISSABLE AS DEDUCTION UNDER SECTION 50 OR ITO OFFICER CAN DEMAND THAT VALUE SHOULD BE BIFURCATED BETWEEN LAND AND BUILDING.
ANY CASE LAWS ON THIS
THANKING YOU
BST REGDS
MAHESH
NOW PURCHASING RESIDENTIAL BUILDING WITH LAND AT COMPOSITE VALUE.
BUILDING IS GROUND FLOOR+1ST FLOOR PLUS SOME LAND APPURTENANT.
WILL FULL VALUE OF PURCHASE BE ADMISSABLE AS DEDUCTION UNDER SECTION 50 OR ITO OFFICER CAN DEMAND THAT VALUE SHOULD BE BIFURCATED BETWEEN LAND AND BUILDING.
ANY CASE LAWS ON THIS
THANKING YOU
BST REGDS
MAHESH
28 February 2009
Land and building are two separate assets under the block concept, one is non depreciable and the other is depreciable.
In view of this the value of new asset should be bifurcated into two and the value of building need only be reduced from that block. To my limited knowledge there is no case law on the subject.
In view of this the value of new asset should be bifurcated into two and the value of building need only be reduced from that block. To my limited knowledge there is no case law on the subject.
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