Depreciation allowed or not

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17 April 2013 Partnership firm running restaurant, purchase hotel premises and done satakhat/unregistered deed as on 05.08.2008 and taken possession of premises from Mr. 'B'. Money given for the premises shown in balance sheet(Unaudited) as under fixed asset head say Rs. 2600000/-.

In the audited balance sheet same amount shown under loans and advances head because registered deed not made up to 31.03.2009(FY 2008-09).

Further, during the FY 2008-09 under survey of premises firm disclosed Rs. 5000000/- as undisclosed income of FY 2008-09 given to Mr. 'B'for the purpose of Renovation of hotel Premises, Furniture etc.

In FY 2008-09 assessee claim depreciation on Rs. 5000000/- for half Year Rs. 250000/-. And no depreciation claim on Rs. 2600000/- as for the purpose of want to claim long term capital gain in future.

And in assessment proceeding depreciation is disallowed on the ground of no explanation given for showing Rs. 2600000/- under loan and advance head under audited balance sheet.

Now my question is whether any difference as advance given shown in loans and advances (as registered deed not ready up to 31.03.2009) or fixed assets on which no intention to claim depreciation.

Kindly give any accounting guidelines for the same.

roshani Tejaskumar Jariwala

roshani Tejaskumar Jariwala (Querist)

18 April 2013 Query still open

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)

19 April 2013 if the possession is taken then there is no requirement to keep such sum in Loans & Advances

why the same is kept under Loans & Advances

either it should be taken in Fixed Assets or should be taken in Loans & Advances both the thing is not possible

how the same is kept in both and how the Balance Sheet got tallied i dont know

but as the possession is taken by the firm therefore the same can be taken under the Fixed Assets

Also have opinion frm other Experts

roshani Tejaskumar Jariwala

roshani Tejaskumar Jariwala (Querist)

19 April 2013 Thanks for your reply sourabh as

Rs. 2600000 shown in loans and advance because registered deed not made up to 31.03.2009.

And balance sheet is tally as Rs. 2600000 under loans and advances of shop/ business premises purchase and Rs. 5000000 under Fixed assets head of.

and what about depreciation claim???

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