Capitalization of FA

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vaishali (Querist)
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07 January 2010 Whether one can capitalize Fixed Asset..Purchased in March end (say 30March) &can deprection be claimed on the same if same has been put to use the very same day...
Please quote some sections/Supporting
as AO has send a notice asking for the same.

Thanku..
Please help..

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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07 January 2010 It is not necessary to use the asset in the same year due to block of assets concept. refer Delhi High court judgement in Bharat aluminium (available at itatonline.org)

Sudhindra

Sudhindra (Expert)
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07 January 2010 As per the provisions of section 32 of the Income tax act where an asset is in the name of the assesse and has been purchased and put to use then the date of capitalisation would the date when the asset is actually put to use.... and can claim depreciation from that date onwards...depreciation as per income tax is allowed at 50 percent of rate applicable if the asset is put to use for less than 180 days in a year, hence in your case even if the asset is put to use on 30th march itself, depreceiation can be claimed and is allowed as per IT act 1961 section 32

Even the same is the case as per the companies act also where the asset is put to use the asset can be capitalised and depreciation is allowed for the proportionate days when the asset is put to use.

You need to produce a proff as to the put to use as to the chartered enginneers cetificate that the asset is put to use and is running condition to the AO as the proof of the asset being used.

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