Manvi Mehrotra (Associate Tax Consultant) (88 Points)
17 September 2013Query:
The assesee resides on 1st floor and has purchased a ground floor + basement of the same building for the official purpose. Can he claim the depreciation on the 100% of purchase consideration paid that includes the cost of land? or does he need to seperate the cost of land and then calculate the depreciation amount on the rest of the cost?
Ankit
(CA, CS)
(3064 Points)
Replied 17 September 2013
Depreciation will be allowed on the purchase consideration of the ground floor plus the basement and not on the total amount.
Also, just have a look at thw wealth tax implications if any…..
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 17 September 2013
| Originally posted by : Ankit | ||
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Depreciation will be allowed on the purchase consideration of the ground floor plus the basement and not on the total amount. Also, just have a look at thw wealth tax implications if any….. |
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Thanks. You mean to say that we will be excluding the cost of land from the total consideration paid?
Ankit
(CA, CS)
(3064 Points)
Replied 17 September 2013
Yes….exclude the land cost from the same
If you have any other queries, please feel free to ask
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 17 September 2013
Now my question is that how do we seperate the cost of the land from the cost of the portion purchased that includes basement plus a ground floor. Also, the first floor is already in the ownership of the assessee as a residential property..
Ankit
(CA, CS)
(3064 Points)
Replied 17 September 2013
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 17 September 2013
No, i dont have the breakup of the purchase cost. What will be done in this case, when we dont know the seperate cost price of land, ground floor and the basement?
Ankit
(CA, CS)
(3064 Points)
Replied 17 September 2013
If there us absolutely no break up available, you will unfortunately take a valuation or then at the most, you can make a calculated assumption as to the value of the land
Manvi Mehrotra
(Associate Tax Consultant)
(88 Points)
Replied 17 September 2013
Thank you so much.
One more question..
now if this property is purchased by the husband through a loan with his wife as the co-applicant, what share of interest paid on borrowed capital can he claim as the busiess expense u/s 36(iii)?
agreement shows 50% ownership of each
wife is a house wife.
naseef
(CA Final, ICWAI Final)
(37 Points)
Replied 17 September 2013
if purchase price is not indicating the cost of land and building separately, then depreciation shall be allowed on whole amount of purchase price ( including land). ( CIT vs Rajesh Export Ltd, 2006)
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