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Depriciation in case of conversion of firm to company

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Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2012 I had a firm till 17.02.2012 now it is been converted to company with all the shareholders as directors .The life of company is (17.02.12-31.3.12).The issue is about appropriation of depreciation between company & firm under Income tax act. is this possible to take proportionate deduction of full depreciation (in above 180 days)i.e. since 1 april 11 to 17th feb 12 in firm & remainning in the company. & same in case of below 180 days.

thanks in advance.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 April 2012 As per Section 32, where a firm is succeeded by a company, then the depreciation for the year shall be apportioned in the ratio of the number of days for which the assets were used by them.

Accordingly depreciation for the whole year shall be computed and thereafter the same shall be apportioned as under:

Firm - 1.4.11 to 16.2.12
Company - 17.2.12 to 31.3.12

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