Depreciation as per cash basis in income tax

This query is : Resolved

Gautam Sharma (Querist)
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27 June 2013 What entry will be made,
if asset is purchased on credit as per cash basis accounting?

And assets use during the year and no payment made during the year.Then in such case depreciation allowed in income tax or not?

If allowed,provide reason OR under which section?
If not then provide the reason as per income tax?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 June 2013 Let us reverse the situation.
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The assessee has made payment for the machinery yet it has not been delivered to him, will he be able to claim Depreciation on the amount paid following the cash basis.
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The asset must be used for his purpose of the business and the assessee should be owner of the asset. If these two parameters are satisfied, in my view, the assessee can claim depreciation. Income-tax Act has its own criteria for allowability of depreciation irrespective of method of accounting being regularly employed by the assessee.
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