A partnershipfirm converted into a company during the midof the year, So what is the process of charging dep whether proportianate or we can charge in partnership and compamy separately 100%
when partnership firm sells its asset , the dep will be provided as per the firm deed if any , or as per practice
when it is converted into a company
it will have an opening gross block as per the consideration of sale
dep as per company s act will be charged on plant & machinery on pro rata basis
for tax audit & form 3 cd purposes , it will charged at full rate if assets are used for more than 182 days otherwise at half rate
The issue can be looked as if the company has purchased the assets .Firm is seller and company is buyer .
Now under the IT Act buyer or seller will get depreciation on the basis of number of days of use........if more than 180 days it is 100% otherwise 50%.
The cost of acquistion for company will be the cost at whcih taken over.
Under the companies act dep may be provided on pro-rata basis i.e. time basis
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