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Suggestion required for Depreciation treatment

Vaib (Sr. Accountant) (42 Points)

18 August 2023

Dear Sir,

We purchase Air Conditions of Rs. 7,00,000/- in the FY20-21 and charged depreciation on it for the FY20-21 & FY21-22.

And in the FY22-23 we received a credit note of Rs. 3,00,000/- from the vendor.

We decreased the assets value from Rs. 3,00,000/-.

Please suggest the treatment of Depreciation(As per Company Act & Income Tax Act).

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4 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14242 Points)
Replied 18 August 2023

As per section 34 of the CGST Act last month to issue GST Credit Note for F.Y 20-21 was September 21 or date of Annual return whichever is earlier and in your Case GST Credit Note was issued in F.Y 22-23 which itself may not be correct , please refer Section 34 of the CGST Act 2017 .

Take other Opinion as well .

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 19 August 2023

Deduct the credit nite from fixed assets and charge depreciation at the reduced value. adjustment needs to be made in IT return for excess claim of depreciation in earlier year. Under companies act depreciation to he charged to income on reduced value at applicable depreciation rate

prasad Nilugal ( GST Practitioner & Accounts ) (14242 Points)
Replied 20 August 2023

@ Karandikar
How Can he issue Credit note of F.Y 20-21 in F.Y 22-23 which is suppose to be issue before September 21 as per section 34 of the CGST Act ? please mention relevant section .