PGBP [Resolved] | Income Tax #460910

This query is : Resolved

CA Vijeta Verma (Querist)

15 August 2010 q1) shall the asset gifted to assessee by friend having business income on which depreciation has never been claimed be added to the block in the usual way & shall depreciation be allowed on same(wdv cant be ascertained because year of purchase is not mentuioned in the ques)..
here will the cost of asset be the actual cost to owner??
q2)is the capital expendiutre on promoting family planning fully disallowed for 20% deduction each yr for assessee not being a company assessee...

Aditya Maheshwari

Aditya Maheshwari (Expert)

15 August 2010 1) As per explanation to section 43

Explanation 2.—Where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the actual cost to the previous owner, as reduced by—

(a) the amount of depreciation actually allowed under this Act and the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and

(b) the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988, as if the asset was the only asset in the relevant block of assets.]

So year of purchase by the previous owner is needed.

2) Yes not allowable u/s 36(1)(ix) other than company.

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