Depreciation
This query is : Resolved
Arun Punyani
(Querist)
10 September 2010
Sir,
Can anybody tells me that if a Factory doesn`t run in a year then it is necessary to charges depreciation on full rate to it?
Please explain.
Thanks & Regards,
ACS Preeti
Can anybody tells me that if a Factory doesn`t run in a year then it is necessary to charges depreciation on full rate to it?
Please explain.
Thanks & Regards,
ACS Preeti
Sheetal Metha
(Expert)
10 September 2010
Depreciation means - A decrease or loss in value, as because of age, wear, or market conditions.
Hence if Assets are not used in the year it necessary to charge the depreciation @ full rate
Hence if Assets are not used in the year it necessary to charge the depreciation @ full rate
10 September 2010
Since the assets were not used for the purpose of the business even for a single day depreciation under Income tax Act,1961 will not be allowed.
Citation :- CIT V Oriental Coal Co
Ltd (1994) 206 ITR 682 (Cal). This judgement is based on a question of law while the factory was under lock-out during the entire financial year.
Citation :- CIT V Oriental Coal Co
Ltd (1994) 206 ITR 682 (Cal). This judgement is based on a question of law while the factory was under lock-out during the entire financial year.
Arun Punyani
(Querist)
11 September 2010
Thanks a lot sir for ur valuable advice.
Regards,
ACS Preeti
Regards,
ACS Preeti
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