Taxation point

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bhavin shah (Querist)
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21 May 2012 Dear Sir,

IT'S Urgent.

Our issues as follow....
1) our private limited company contionus from 2008 onwards.

2) Now we want change my register/HO Office from 3rd floor to 1st floor in same building.

3). 1st floor office is property of director.

4). In this property, company making centralized air-condition in this office which use (working staff in this office) by company for there addition of new business (i.e. centralised air-condition business).

5. can company go with director as rent aggrement? because company use this office for business purpose. - pls. advise as per incometax point of view.

6. if yes, then director in his business income (arises out of DTA Commission agent) deducted this office deperication? and rent income treated in hand of director as income received from other sources (this office director use for his business i.e. commerical property).

7. and company has capitalised this centralised air-condition (Appox. Rs. 3,00,000) and can charge deperication on that?

8. if company go 3 yrs rent agreement with director then after agreement discountionue....then centralised ac net value after 3 years e.g. 2,00,000. then what impact on rest of net value of A/C in books of company.

Soumitra Basu

Soumitra Basu (Expert)
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27 May 2012 Company can execute a rental income with the director for using the office. The income shall be treated as income from business in the hands of the director since it is a commercial property. Depreciation will be deducted from the rental income. The company can claim depreciation on the Air Condition Machine also.

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