Please help - Depreciation

Originally posted by : Paras Bafna
	I think, the word succession has confused to all. In terms of Section 45(3) , it is a transfer. Whenever the transfer takes place, the transferer prop. firm will not get any benefit as per the depreciation provisions. We know that when an asset is sold, in the year of its transfer, depreciation can not be claimed on such  transferred asset. So, here my view goes against all the participants and hope every one will agree with me. Proprietary concern will not claim any depreciation on the assets which are being transferred to the new partnership firm. It has to do the exercise of calculation of capital gains on the capital asset which are being transferred  into the Partnership Firm as capital contribution or otherwise. The firm shall claim depreciation. Since the assets have been utilised for less than 180 days, Dep. Will be allowed  @ 50% of the normal rate.

Thank you very much sir

I have gone through the 5th proviso of Section 32. 

It provides for proportionate depreciation broadly in those events which are not treated as transfer U/s 47 or in the cases of succession.

Had the prop. firm been converted into pvt ltd. company ... we may claim proportionate depreciation.

Agree with you Paras sir.

If it will be a case of Proprietorship to company, then 5th proviso will be attractd.

In this case it is proprietorship to firm, so 5th proviso is not applicable

Thank you sir..