Depreciation

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mahaveer dhelariya (devta) (Querist)
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01 November 2012 why not dep. on dustbin in small industry. but dep. on computer eligible, if industry have large scale turnover & computer cost is 0.005% of turnover. then eligible for depreciation on computer. why? what logic

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 November 2012 Depreciation is admissible on a CAPITAL ASSET. The proportion of expense to the turnover is NOT the criteria for calculating admissibility of depreciation.

If the expense results in acquisition of an asset, then depreciation shall be admissible.

Purchase of dustbin is a revenue expenditure, whereas purchase of computer is a capital expenditure.

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