Expenditure on property

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karan pahuja (Querist)
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26 April 2012 i have sole properietor ship firm & if i buy any property or flat then can i show it as my expendidure on business & for that i can releave from profit minus expenditure from purchasing of property.

Dilip Kumar Agarwal

Dilip Kumar Agarwal (Expert)
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26 April 2012 Friend,

Since you have a sole proprietory firm and assuming that you are proprietor of the same, if you purchase a property which is to be solely used for business purposes of that firm, you may purchase it in your name and you may charge depreciation as per provisions of Income Tax Act, 1961 and such property will be shown in the Balance-sheet of the firm and in the P&L you will charge the depreciation. Cost of purchase of property cannot be debited to P&L account as expense as nature of transaction is not of revenue nature.

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karan pahuja

karan pahuja (Querist)
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26 April 2012 if i purchased the property for rs 10 lakh
then it would not whole rs 10 lakh deducted from my profit?

Dilip Kumar Agarwal

Dilip Kumar Agarwal (Expert)
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27 April 2012 No. Please refer my answer given earlier.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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04 May 2012 No the property is Fixed assets and it cannot be shown as an expenditure. If it is for business you can claim depreciation otherwise not permitted. The experts have given their views which is correct

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