Depriciation
This query is : Resolved
Guest
Guest
(Querist)
19 October 2009
suppose a machinery is purchased on 1-01-01 installed on 1-02-01 inuagrated on 1-03-01 test trial done on 1-04-01 and production through it started on 1-05-01. My question is - from which date would we consider the depreciation charge?. from which date chould we charge depreiation on it? please help. actually i dont know u but seeking for a good answer
19 October 2009
Installation date has to be considered for depreciation under companies act and Production date has to be considered for income tax purpose.
20 October 2009
Income tax :-depreciation to be allowed from installation date ie 1/2/01.
"Used for business" in sec 32 would mean ready to use and includes passive use .Its not necessary that the machinery has to be in active use .
As long as the assessee owns the asset and the asset is ready to use , i guess depreciation has to be allowed .
my view differs from Srinivasulu ji
"Used for business" in sec 32 would mean ready to use and includes passive use .Its not necessary that the machinery has to be in active use .
As long as the assessee owns the asset and the asset is ready to use , i guess depreciation has to be allowed .
my view differs from Srinivasulu ji
20 October 2009
Date of Put to use i.e.01/02/2001. is taken for income tax depn.
21 October 2009
depreciation will be allowed if the assessee fulfills the two conditions:
1. assessee owns the assets
2. the assets is used for the purpose for business or profession in the year of acquisition.
in your case we have to decide what is the meaning of assets used for the purpose of business or profession.
(ie whether the date of installation 1.02.01 or the date of commercial run 1.05.01.)
(date of purchase & date of inaugration is irrelevant in this case)
as per decided case laws use word includes ready to use. therefore as soon as the asset is ready to use as well as owned by the assessee, depreciation can be charged.
hope you will be satisfied.
1. assessee owns the assets
2. the assets is used for the purpose for business or profession in the year of acquisition.
in your case we have to decide what is the meaning of assets used for the purpose of business or profession.
(ie whether the date of installation 1.02.01 or the date of commercial run 1.05.01.)
(date of purchase & date of inaugration is irrelevant in this case)
as per decided case laws use word includes ready to use. therefore as soon as the asset is ready to use as well as owned by the assessee, depreciation can be charged.
hope you will be satisfied.
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