depreciation

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Prakash (Querist)
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22 August 2008 last year the firm did business, that time they claimed depreciation for factory, but this year stoped their manufacturing business and letout the factory premises now this people can claim depreciation for that fatory premises

CA Nallathambi Srinivasan

CA Nallathambi Srinivasan (Expert)
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22 August 2008 If the ownership is not transferred to others, then thay can avail the Depreciation.

CHEZHIYAN

CHEZHIYAN (Expert)
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22 August 2008 Even they let out to others.. they are the owner of that factory.. it has its own wear & tear..

Depreciation can be claimed untill they transfer their ownership

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Prakash

Prakash (Querist)
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22 August 2008 if letout property IT gives 30% deductions that include depreciation

Ranjit Ahluwalia

Ranjit Ahluwalia (Expert)
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25 August 2008 From Company Law view point, Depreciaiton can be claimed when the asset is ready for use and that was last year. Normally, if the production is permanently stopped, you may have to calculate the impairment of asset and its usefulness for the company. Depreciation can be provided after netting off the impairmnent loss. Alternatively, if the Comapny M&A allow and Leeting out propert is one of the Object of Business, than it can be argued that asset (i.e factory) is used for letting Business and deprecaiiton can be claimed on the same after recalculaing useful life of asset. From income tax point of view, Depreication is allowed when the asset is put to use and Block concept is used. If there are some other assets in same block that you may continue to get depreciation. In other case, Dept may take contrary view and matter may be argued. IT is better that M&A shall be altered so that the same argument as in Companny Law can be taken and in that case, Co. can avoid litigation.