Depreciation in case of convertion of proprietorship concern into partnership
If the proprietorship is converted into the partnership dated 30th of November and if he transfer all is asset to the partnership business then who can claim the depreciation for the asset?
and while filing the personal return of the proprietor does he would able to get depreciation on the income earned by him from 1st April to 31th Nov.
Replies (5)
till 30th nov properitor get the benefit of depreciation then after it is applicable to partnership firm from 1st dec to 31st march
till 30th nov properitor get the benefit of depreciation then after it is applicable to partnership firm from 1st dec to 31st march
Thankyou. Please give me the referance of the section.
REFER TO SECTION 170 FOR COMPUTATION OF BUSINESS INCOME IN CASE OF SUCCESSION AND FIFTH PROVISO OF SECTION 32 FOR DEPRECIATION.
However, induction of partners will be treated as transfer and not succession. Refer to CIT v H. Rajan & H. Kannan (1999) 236 ITR 42 (SC). Therefore, in my opinion, depreciation will not be allowed to proprietor and will be allowable to partnership firm for remaining period.
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