Whether amount capitalised under sec 43A (consequential to changes in rate of exchange) of IT Act is eligible for full year depreciation or it also has to be bifurcated for 180 days???
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Sec 43a
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180 days. Further depends on circumstances of the case. For instance, date of purchase say nov'12 at 55 USD..and if assessee took forward exchange contract on 8.10.2013 at the rate of 60 USD. then depr for FY 2012-13 50% of normal rate at 55 USD and for FY 2013-14 full depreciation on 60USD
depreciation will be allowed only in the year of actual payment of foreign currency loan as per sec.43A
@ ravinder.. Court held in the case of NEW INDIA INDUSTRIES LTD that increase in liability due to rate fluctuation shall be added to actual cost of asset, irrespective of the fact whether the same is to be discharged in instalments which become due in near future.
According to me As per the above , actual pmt is not required. once it added to actual cost of asset then depreciation shud be calculate on actual cost only. Further sec.43(1) says the same on exchange rate difference.
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