depreciation

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MANISH MITTAL (Querist)

13 June 2009 A is the partner of ABC & CO. He introduce capital in the form of stock transfer and immvable property. but title chain is continue in the name of A only i.e. not transfer at sub registrar office of concern state. Can partnership firm benefit of depreciation merely use of such property for business purpose and accounting of partnership firm.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)

14 June 2009 In my opinion, the AO has a right to disallow the depreciation and other expenses u/s 30 since this is attempt to avoid stamp duty.
But if capital gains tax and stamp duty is paid by the partner, only registration is pending, then there is no reason for disallowance.

MANISH MITTAL

MANISH MITTAL (Querist)

18 June 2009 Thanks Nitin Ji
After your contion we read some case law settle by high court which capital contribution is a transaction only therefore no require to register such documents at sub-registrar office. further rajasthan hight court allow depreciaton on such property.

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