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Purchase of old cold storage unit in the state of odisha

128 views 1 replies

shubbham patwari

Practice

50 Points Joined December 2010

Dear Members, One of my client intends to purchase an old cold store, whose possession has been taken by the bank for non payment of bank loan by the previous owner. Now my client wants to know whether he is eligible to claim subsidy or avail the benefit of sec 35AD or avail any other other benefit under any other schemes. The cold storage unit was previously a proprietorship concern located in the state of Odisha with a capacity of 2500 MT.

Replies (1)

manan kansal

student

44 Points Joined September 2016

Dear Shubham ,
As per Sec. 35AD of Income Tax Act 1961 , an assessee is allowed to debit 1.5 times of the Capital expenditure to PROFIT AND LOSS ACCOUNT of the relevant AY in case of a business of COLD CHAIN FACILITY for storing agricultural produce , meat and meat products , poultry and dairy products etc. And the Capital expenditure incurred before the commencement of business is also allowed to be debited.
The Act doesn't specify whether the cold strorage to be owned shall be a new or old as Act does for Sec. 32 , 32AC , 32AD where no deduction is allowed to second hand plant & Machinery . Hence , you may claim the benefit the benifit available under Sec 35AD provided you use the cold storage for the puposes mentioned in the act .