Depreciation
This query is : Resolved
12 April 2011
For the purpose of charging depreciation the act says that 50% will be permissible in case asset is put to use for less than 180 days..
now if 180 days are to be counted from 1st of April then it would come to 27th september.. but it is seen in many cases that even if an asset has been put to use on 1st of october 100% depreciation is claimed... is that valid as per law.. a rough estimate of six months would validate the act but the act specifies 180 days..
thank you..
now if 180 days are to be counted from 1st of April then it would come to 27th september.. but it is seen in many cases that even if an asset has been put to use on 1st of october 100% depreciation is claimed... is that valid as per law.. a rough estimate of six months would validate the act but the act specifies 180 days..
thank you..
12 April 2011
Pl adhere to 180 days concept otherwise disallowance attracts on scrutiny assessment.
12 April 2011
Your interpretation is wrong. 180 days will be counted from 31st march (backward calculation). Therefore addition upto 3rd October are eligible for 100% depreciation.
Regards,
CA. Sandeep Aggarwal
Regards,
CA. Sandeep Aggarwal
15 April 2011
one more thing is that as per proviso to section 36(1)(iii) interest paid on loan taken for acquiring a capital asset is to be capitalised upto the date the asset is first "put to use"..
what would be the case where as asset is purchased for emergency purpose.. depreciation will be allowed because use includes passive use also but the issue is regarding capitalisation because the section uses the words "put to use".how much interest will we have to capitalise...
what would be the case where as asset is purchased for emergency purpose.. depreciation will be allowed because use includes passive use also but the issue is regarding capitalisation because the section uses the words "put to use".how much interest will we have to capitalise...
18 April 2011
I could not get your query. Even for emergency purchase actual interest upto put to use can be capitalised. For routine capitalisation it is not possible to identify the interest amount with capitalisation. You can directly claim the interest as expenditure.
Regards,
Sandeep Aggarwal
Regards,
Sandeep Aggarwal
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