04 March 2011
Dear Experts, U/s 33AB the amount withdrawn from deposit in NABARD/ Special Deposit a/c, is used only for the purpose of business and Purchase of eligible P&M. However, the expenditure incurred on this (utilisation of Deposits) is not allowed as deduction under any provisions of this Act. Query: 1. Suppose, the amount withdrawn from this Deposit to purchase of eligible P&M, Whether the Depreciation can be claimed on this said P&M? 2. The amount withdrawn from Deposit is utilised for Renovation of Factory builging on lease hold land is Capitalised and Written off over a 5 year period is allowed as a Deduction?
04 March 2011
1. Depreciation can be claimed since there is no specific bar either in section 33AB or in section 32 of the Income tax Act,1961. 2. Renovation is ineligible since the scheme is only for construction and extension of factory building.
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