Treatment of deprication and capital gain on fixed assets, if proprietary concern transfer to partnership firm.

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ayaz

student

129 Points Posted on 02 June 2014

if proprietary concern transfer its all asset to partnership firm on 11th Oct at its book value as per IT as on last PY, then - 1:. whether proprietary concern can claim depreciation.. if yes then who much 50% or 100% in IT. 2:. whether partnership firm can claim depreciation.. if yes then who much 50% or 100% in IT. DOI 11th Oct. 3:. whether there will be Capital gain if asset are transfer at there BV. 4:. whether there will be Capital gain if asset are transfer at higher amt then it's BV.

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Guest

Posted on 02 June 2014

As per I tax act both will claim deprication 50% as per co act upto10th oct dep will be claimed by proprietorship and after that by partnership firm

karan jit singh

Consultant

1148 Points Posted on 02 June 2014

Originally posted by : ayaz
	if proprietary concern transfer its all asset to partnership firm on 11th Oct at its book value as per IT as on last PY, then - 1:. whether proprietary concern can claim depreciation.. if yes then who much 50% or 100% in IT. 2:. whether partnership firm can claim depreciation.. if yes then who much 50% or 100% in IT. DOI 11th Oct. 3:. whether there will be Capital gain if asset are transfer at there BV. 4:. whether there will be Capital gain if asset are transfer at higher amt then it's BV.

1. No Depreciation is allowed as block ceases to exist under section 43(6).
2. Partnership firm can claim depreciation under section 32. 50% depreciation can be claimes as per section 32 assuming that it was used in same date.
3. If transferred at book value there is no capital gain.

4. If asset is transferred above the WDV then same is chargeable under the head Capital Gain under section 50.