Depreciation claiming provisions

DEAR EXPERT, WE HAVE CLIENT WHOSE FACTORY IS JUST STARTED. ALL THE PRE-OPERATIVE EXPENSES RELATED TO FACTORY ARE BEEN CAPITALISED AS CAPITAL WIP. I HAVE A QUERY WHETHER CAN WE CLAIM THE DEPRECIATION ON THE MOTOR CARS AND BIKES WHICH ARE NOT USED FOR MANUFACTURING THE GOODS??
Replies (5)

No you can't take depreciation without being "put to use" Motor car as per section 32 of IT Act, however there is not clear that this motor and car are exclusively for manufacturing as you mentioned?

Yes, the depreciation can be claimed; if they are being used for business purpose. The business purpose doesn't include manufacturing only.

MOTOR CARS AND BIKES ARE ALREADY PUT TO USE IN THE FACTORY BEFORE COMMENCEMENT OF MANUFACTURING/PRODUCTION.

 

MOTOR CARS AND BIKES ARE NOT REQUIRED FOR PRODUCTION BUT ARE BEING USED FOR TRAVELLING IN FACTORY.

 

PLEASE GUIDE WHETHER WE CAN CLAIM THE DEPRECIATION OR WILL IT BE CAPITALISED AS CAPITAL WIP?

THANKS MANISH

EVEN I AM OF THE OPINION THAT WE CAN CLAIM THE DEPRECIATION ON FIXED ASSETS WHICH ARE NOT REQUIRED TO BE USED IN MANUFACTURING PROCESS.

 

BUT NEED SOME CLARITY IN THIS REGARD!

These are business assets and being used in business. So, depreciation is allowed under income tax law.

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