Depreciation

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S.Veda Prakash (Querist)
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19 May 2008 A company which was in business till financial year 2003-04 was claiming depriciation under Companies Act but stopped activities in that year and did not put its P&M to use in the financial year 2004-05. Can it claim depreciation for the FY 2004-05 and onwards.

IF yes please give me the Sec No.

Shekar

Shekar (Expert)
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19 May 2008 One of the basic conditions to claim depreciation u/s 32 of Income tax act is tht asset should be put to use during financial year...so going by the facts furnished by the company cant claim depreciation..

Amit Sharma

Amit Sharma (Expert)
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19 May 2008 Dear Veda Prakash,

The answer to your question is no, it cannot claim depreciation as th assest was not in use during financial year.Hence depreciation on that cannot be claimed.

S.Veda Prakash

S.Veda Prakash (Querist)
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21 May 2008 Thank you for the reply but in one of the case law the kerala high court has held that even if the assets is in the state of ready to use we can claim dep.

On this ground is it possible

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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21 May 2008 THe question is with respect to CA Act or IT Act?

S.Veda Prakash

S.Veda Prakash (Querist)
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21 May 2008 Balance Sheet is prepared as per Companies Act, so I want to know whether we can charge dep in p&l and claim it as an exp for the purpose of IT.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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21 May 2008 hi Veda,

although i don't know facts of that case u mentioned but i am sure that it would be the case where business was on and assesse had put the asset for use but in actual never used it and asset was always ready to use. it is not relevant in ur case coz u have stopped business activities.

u can't claim dep. under both acts.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)
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03 June 2008 replied

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