Depriciation on Capital Work in Progress

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varun gupta (Querist)
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13 February 2010 A company purchased some Machines in F.Y 2008-09 but has not put them into use till 31st March 2009 and hence transferred them into Capital Work in Progress without claiming any depriciation over them under Cos Act and Income Tax act. But now in F.Y 2009-10, these machines have still not been put into use. Then, will the Company eligible to claim depriciation under Cos Act & Income tax act over these assets or they should be still shown under Capital Work in progress withoug claiming any Dep.?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 February 2010 If the machinery is yet not ready for use then the same should still be kept in work in progress and no dep to be claimed.

varun gupta

varun gupta (Querist)
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15 February 2010 So, it will be kept under CWIP even if not put to use in 3yrs from date of purchase? If any intt is being paid on the borrowing cost, will the same be also capitalized upto the period the Machine has not been put to use?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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15 February 2010 Yes Interest paid on borrowings for machinery purchased will also be capitalised upto the date of put to use as per AS - 16

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