A public limited company bought a machinery on 1.4.2000. It continued to use the machinery till 2009. In 2010 the company discontinued using the machinery and bought a replacement for the same. Since the company has another facility in another location it decided to reinstal the old machiery in the year 2011. Can the company claim depreciation for the old machinery from the date of its discontinuance to the date of reinstallation of the same in some other location?
Menu
Allowability of depreciation
Replies (2)
hii sathya
No, i dont think that the company can claim depreciation as the machinery is not PUT TO USE in other location between that period and as per COMPANIES ACT there is a condition for claiming depreciation that it must be put to use
Hi Sathya,
I think, a company can claim depreciation for the period - discontinuance to reinstallation.
There is no such provision that the same asset can be put to use TWICE.
Once asset you put to use, it is immaterial whether you use it for production or not.
Logic behind depreciation is that, asset decays with TIME & use.
If we consider the TIME factor, value of that asset has been lost.
Hence, I think depreciation is allowed.
Recent Topic
- GOODS AND SERVICE TAX - GSTR 1
- Correct ITR form
- Clarification required on Section 393 & Report
- Professional advance taxes
- Surrender pan process
- Tds on deceased's pan
- Exempt income declaration schedule EI in ITR2 (AY2
- Mold cost invoice in GST return
- WhatsApp document sharing: Client sends Aadhaar, P
- GST Registration Cancelled for Non-Filing Returns
Related Topics
CAclubindia
