Depreciation on Assets fraudulently purchased
This query is : Resolved
16 July 2024
Company had capitalised some Assets in past years & claimed depreciation on the same. However, during physical verification of fixed asset in subsequent year, it was found that the assets have never entered to premises of the company. The purchase manager has fraudulently produced invoices, took the delivery of the assets & absconded. The company is now writing off those assets in the books. What will be the treatment of this fraud in the depreciation as per Income Tax Act? Whether the company can claim depreciation as the cost of those assets is a part of the WDV.
17 July 2024
1. Whether police complaint filed for the fraud? What is its status?
2. How about insurance claim?
2. How about insurance claim?
17 July 2024
Police Complaint filed but proceedings are yet to start. Assets were laptops, not insured by the company.
17 July 2024
Should not close the matter as on date, till the police investigations are completed.
Secondly, you cannot depreciate the assets anymore.
Secondly, you cannot depreciate the assets anymore.
17 July 2024
Ok, we should reduce the WDV to the extent to of depreciated value of those assets, right ?
17 July 2024
WDV of the asset is already reduced by depreciation claimed earlier, how can you reduce it again?
Whether any depreciation was not claimed earlier?
Whether any depreciation was not claimed earlier?
17 July 2024
Depreciation was claimed in FY 22-23 ie in the year of purchase.
17 July 2024
For FY 23-24 you cannot claim any depreciation.
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