depreciation on fixed asset

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tarin shah (Querist)

17 July 2008 hi,

mr X purchases the machinery worth Rs. 1,50,000 but he pays Rs. 145000 only and the remaining difference is transfer to the Kasar & Vatav a/c..
my question (1) whether the asset can be showed with full value as it represents the fair market value? and dep. should be calculated on it?

(2) should be shown on actual amount paid as income tax says that dep. should be calculated on actual amount paid of asset..

please provide me with sufficient reply..

regards,
Tarin Shah

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

17 July 2008 The depreciation is to be calculated on the actual cost of machinery.

CA. Yayati Tyagi

CA. Yayati Tyagi (Expert)

17 July 2008 43. In sections 28 to 41 and in this section, unless the context otherwise requires:

(1) actual cost means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority:

means if x had paid only 145000 and bal 5000 is paid by kasar, then x can claim dep. on 145000 only.

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