depreciation

Dear,

Yes.

The Explanation (1) to Section 32(1)(ii), which took effect from April 1, 1988, provides that where the

business is carried on in a building in respect of which assessee holds a leaser or other right of

occupancy and any capital expenditure is incurred by the assessee for the purpose of business on

construction of any structure or doing of any work in relation to renovation and extension, then it shall

be assumed that the structure is owned by the assessee.

stress :

Prior to the introduction of this Explanation, there was a controversy as to the allowance of

depreciation on assets of this nature. Now, there is no doubt that company can claim depreciation

on the addition made to leased property.