Hi,
We have a case where the owner (say Mr.A) of one proprietorship concren has gifted assets, which has machinery and sheds, related to that firm to his son (Mr.B) on 1-1-17.
Mr A firm and Mr B firms are two different entities as they are proprietorship in nature.
Now can Mr.A firm claim Depreciation on the assets for the peroid 1-4-16 to 31-12-16 and can Mr.B claim depeciation for the period 1-1-17 to 31-3-17.
Kindly share your views on this!
Thank you
In my view,
Mr A claim the depreciation for the asset above said period...
Mr B can't.
Bcoz, The gift is given individual not to the firm.
By the facts of the case, my understanding is as under -
Gift is not regarded as Transfer for the purpsoses of income tax act. Since the asset is not transferred, then Mr.A can still claim depreciation on it. Mr. B cannot claim depreciation of the same.
| Originally posted by : RAJA P M | ||
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In my view, Mr A claim the depreciation for the asset above said period... Mr B can't. Bcoz, The gift is given individual not to the firm. |
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He has given gift to Mr.B only, but it was mentioned that the gift is given for the purpose of doing business and Mr.B started a new firm on his name.
Now how to consider this?
| Originally posted by : Pushpak Lal | ||
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By the facts of the case, my understanding is as under - Gift is not regarded as Transfer for the purpsoses of income tax act. Since the asset is not transferred, then Mr.A can still claim depreciation on it. Mr. B cannot claim depreciation of the same. |
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Thank you sir,
The asset is indeed transfered by gift deed in registaror office. Kindly consider this and post your views please. thank you
| Originally posted by : RAJA P M | ||
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Yeah... The gift to Mr. B's name not to the firm. In case it's to the firm name then it ll be treat as Sales / Purchase for A / B's. It's follow business deal then both are claim the depreciation on above said period. Otherwise not applicable to B..... | |
Sir. Thank you for the reply.
I found this article @ https://www.moneymantan.com/2011/05/05/allowability-of-depreciation-section-32/
In this the author mentiones these lines
"Circumstances in which proportionate depreciation can be allowed under IT Act.
Circumstances: Under the following circumstances depreciation can claimed on a proportionate basis-
I think point number 3 matchs my case.
Your views please. Thank you
| Originally posted by : Giridhar S Karandikar | ||
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there's no succession of business but only an asset is being transferred | |
ok. Thank you sir
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