Depericiation
This query is : Resolved
CA NILESH AGRAWAL
(Querist)
31 July 2011
A partnership has been converted into proprietorship on 30/06/2011. My query is how we have to charge depriciation in books of partnership firm and books of prop. firm? According to me in part. firm three month dep will be charged. And then on balance which has been c/f to prop. books full year dep will be charged on WDV as on 01/07/2011.
CA PARAS BAFNA
(Expert)
31 July 2011
When a firm converts into proprietorship the distribution of its assets is treated as transfer. Section 45(4)
.
Firm will not be allowed any depreciation.
.
Prop. Firm can claim depreciation on the value of asset at the cost on which it has been taken over by it from the firm.
.
Firm has to pay capital gains tax, if any arises to it due to distribution of asset at a value higher than its book value or WDV.
.
Firm will not be allowed any depreciation.
.
Prop. Firm can claim depreciation on the value of asset at the cost on which it has been taken over by it from the firm.
.
Firm has to pay capital gains tax, if any arises to it due to distribution of asset at a value higher than its book value or WDV.
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