Business building
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 May 2012
Dear expert,
One of my client is a lpg gas dealer and started business in fy 2011-12. In sales tax registration he is sole proprietor of the firm. He constructed office and godown at his ancestral agriculture farm and for the construction of building his father invested money out of his gratuity fund.
Here I want to know that, he should clamim depreciation on building in his P&L A/c and balance sheet or he should claim expences of rent for business building.
Please advise me.
One of my client is a lpg gas dealer and started business in fy 2011-12. In sales tax registration he is sole proprietor of the firm. He constructed office and godown at his ancestral agriculture farm and for the construction of building his father invested money out of his gratuity fund.
Here I want to know that, he should clamim depreciation on building in his P&L A/c and balance sheet or he should claim expences of rent for business building.
Please advise me.
30 May 2012
Facts are:
1. Office & godown built on ancestral property.
2.Construction cost met by his father's gratuity money.
Two alternatives:
1.Bring in his father as a lender or investor to the firm. Pay interest if taken as lender or share profit if taken as investor simultaneously claiming depreciation.
2.Enter into a lease agreement with him and charge the rent to P& L.
In the above case 2nd option is better.
1. Office & godown built on ancestral property.
2.Construction cost met by his father's gratuity money.
Two alternatives:
1.Bring in his father as a lender or investor to the firm. Pay interest if taken as lender or share profit if taken as investor simultaneously claiming depreciation.
2.Enter into a lease agreement with him and charge the rent to P& L.
In the above case 2nd option is better.
30 May 2012
Status of the assessee not mentioned. 1).If he is carrying on business in his Individual Status, and the property belongs to HUF, he can pay rent and claim the same in p&l a/c as expenditure.
2). If the property belong to father only, he can pay and claim rent.
3). If the business is in HUF status, and building also of HUF, he can claim depreciation.
4).If the business is HUF and building belongs to father's Individual status, he can claim rent.
2). If the property belong to father only, he can pay and claim rent.
3). If the business is in HUF status, and building also of HUF, he can claim depreciation.
4).If the business is HUF and building belongs to father's Individual status, he can claim rent.
30 May 2012
Dep. can not be claimed, because the property is owned by HUF and not by the individual assesee, so he shoukld enter into a lease agreement with HUF and pay rent, such rent will be deductible as a expense
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is Aadhar PAN linking required for opening bank account?
- Applicability
- CPC Processing IT Return for AY 2023-24 without recognizing the Taxation Option under New Regime
- Where to show the RCM on Rent paid to unregistered landlord
- RCM - commercial rent paid to URP under GST
- TDS NUMBER SURRENDER
- GSTR-3B - Do I file nil when there is no sale but I've bought raw materials
- Legal heir raised refund , but refund issued to the closed account of deceased.
- Gst Sales of FY 2023-24
- Offsetting interest income against derivative trading losses
- My Last working day in current org is in novemebr 2024 but they are asking me to submit IT proof
- Indexation benefit applicability
- SEC 54 OF IT ACT
- Passed group 2 exams under wrong gender
- REQUIREMENT OF 15CB
- QUERY FOR RCM ON RENT
- APPEAL-CIT
- Payable outstanding for years disallowance
- Whether still royalty
- Issue of gst e invoice
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
