Depreciation of Imported Demo machine

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Subramanian (Querist)
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20 March 2011 Hello

We are distributors of imported machinery and have imported a machine which is solely used for Demonstration. i.e It will not be sold but will be used for soliciting business.

Can we claim depreciation for the machine. If yes, on what Value - CIF or landed & at what rate.

Also we are a proprietory firm, so can i claim depreciation of the machine when filing returns in my name (proprietor) as I have been receiving commisions (under 194H) from another Indian Company and also from my foreign Principal.

Ranjan Dayal

Ranjan Dayal (Expert)
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21 March 2011 Hello

You can claan im depreciation on your demo machine & the value of Machine will be landed cost of machine.

If you maintain the books of accounts than you can claim the depreciation.

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Subramanian

Subramanian (Querist)
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21 March 2011 Thank you for the quick reply. I am not Finance background & hence kindly bear with me if the questions are silly.

By book of accounts do you mean Audited accounts or self made computation at the year end for filing ITR.

Please note that i have only started invoicing in the current year & my turnover will be less than 12 lakhs. However most of my transactions are commision based (both current year & previous years). So i havent maintained book of accounts but i file returns with Computation sheets.

Is it possible to still claim depreciation. Thanking you again.

CA Namrata Dedhia

CA Namrata Dedhia (Expert)
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22 March 2011 You can claim depreciation on the demo machine. Cost of the machine will be all cost you have incurred to get the machine to your factory/office, i.e., purchase cost, freight, duties, etc.

You can claim depreciation even if you file return with computation sheets. But in the long run, it is preferable to maintain proper books of accounts even if transactions are less.

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