Hello Sir and Friends
My Friend is intended to purchase an existing hotel. Now he wants to know is there any benifit available under section 35AD ? if yes, then please give full details regarding such benifit under section 35AD. Please be spedific on your answer keeping in mind that the hotel he purchase is an existing hotel (3 Star Category). I have read this section but I cannot conclude any specific answer.
THANKS IN ADVANCE
Regards
AMIT KUMAR PANDEY
There are two conditions to be fulfilled for claiming Section 35AD deduction as follows:
1) Specified business is not set up by splitting up, or the reconstruction of a business already in existence.
2) It is not set up by the transfer to the specified business of machinery or plant previously used for any purpose (i.e. new plant & machinery is to be used)
So keeping in mind first condition, in my view your friend cannot claim section 35AD deduction.
Yes as rightly said by mahesh 1st condition under section 35AD is not fulfilled therfore no benefit is availiable in ur frnds case.
CAclubindia
