Dear friends,
Have a query,
Mr. A had brought a second hand car on 01/09/2009 for Rs. 250000/- which was in running condition and he put to use on 5/9/09 for his business. He incurred some expenses for improvement of engine for fabrication of engine, etc. on 15/10/09 amounting to Rs. 120000/-. These expenses are of capital nature and would be added to the block of asset. Now the question is that since the car is already put to use will Mr. A be entittled to full depreciation on entire value of Rs. 370000/-? or he will get full depreciation on Rs. 250000/- and half depreciation on Rs. 120000/- because it is incurred in october (say put to use for less than 180 days) even though there is no new asset created by the fresh expense of Rs. 120000/- and the car on which it was incurred was put to use for more than 180 days?
Please give some base for the answer........ a judgement or relevant provision.......
CAclubindia
