allowability of depreciation

This query is : Resolved

tarun (Querist)
Follow

03 July 2010 date of possession of property:-10/04/2009(Power of attorney) amount Rs.10000000

Payment of Stamp Duty:-05/05/2009 Amount Rs.300000

Payment of Registration fees:-10/10/2009 amount Rs.1200000

Payment on transfer deed:-20/04/2010 amount Rs.100000

My question is how much depreciation will be allowed to me in both the years and why?

A/y 2010-11
A/y 2011-12

CA.Amit Revankar

CA.Amit Revankar (Expert)
Follow

04 July 2010 Only owner of asset get the benefit of depreciation. Owner in general terms means the person who legally hold the possession of asset. In other words, who legally own the asset, including exception based on fact and circumstances. Similarly for the purpose of depreciation on immovable property, income tax act refer the transfer of property act, which say that buyer is the owner of asset when he receive the possession of property and he is willing to pay the consideration for the same.
Added by author-
Based on understanding and considering various judicial decision, it seems that Income tax is very pratical when it comes to compliance, its only target is to ensure that purpose of act is not defeated in anyway.

Based on above discussion its clear that Depreciation will be allowed for both year

tarun

tarun (Querist)
Follow

04 July 2010 i agree with ur view n with the inntention of it dept
I want to know how much is the depreciation
Is it
For a/y 2010-11
on 100% OF 10000000+300000
AND 50% OF 1200000

For a/y 2011-12
100% of 100000

Or these expenses are to be treated as revenue expenditure
Coz there is no substantial increase in the value of asset due to these expenses

Plz reply
Or give me ur number i will call u

Upgrade to CAclubindia Pro. Subscribe Now!

CMA. Dinesh S Adhikari, ACMA

CMA. Dinesh S Adhikari, ACMA (Expert)
Follow

09 July 2010 I hope you are asking this question for Income Tax purpose.

For Income tax purpose, depreciation is computed on ACTUAL COST incurred by the assessee.

Now, here because all amount incurred by the assessee therefore, assessee can claim depreciation on whole amount, which paid towards the proper acquisition/title of property.

This means Apart from Cost of Property other expenses are also liable to capitalized.

Regards!!!