depreciation not charged last year on building due to wrong classification

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Rajesh khurana

Practicing CA

23 Points Posted on 13 October 2007

dear friends

I hv come across a problem that a co. had classified building in the Land head in Fixed asset and the depreciation had not been charged on the same last year. the amount was very big and the effect of tax was Rs. 3.5 lacs which was already deposited.

now in current year what is the remedy. whether i should revise the return for last year or in current year should i change the classification in building and charge dep. on the same. what should i comment in my audit report rg. this. what will be the effect of last year's depreciation amount on the same.

kindly reply the mail ASAP

thands & rgds

CA Rajesh khurana

Replies (2)

Late CA Sampat Jain

Chartered Accountant

4609 Points Posted on 13 October 2007

In the current year you may pass a retification entry as prior period item .Then , claim in the current year depreciation on the shoul be WDV of last year . Prior period item will be not allowed in the current year ..........you may revise the return of last year , if it is filed within due date.

Guest

Posted on 25 May 2008

A Charitable Institution is not charging Depreciation to any of its Fixed Assets. Is it Legally right? The members think by charging depreciation their Assets will reduce & so people will stop giving donation to the institution. Can they do so? If not, then what will be the consequences of it & how can it be rectified? The Institution is not entitled to Sec 80c.

Please Reply Soon........