19 October 2009
suppose a machinery is purchased on 1-01-01 installed on 1-02-01 inuagrated on 1-03-01 test trial done on 1-04-01 and production through it started on 1-05-01. My question is - from which date would we consider the depreciation charge?. from which date chould we charge depreiation on it? please help. actually i dont know u but seeking for a good answer
19 October 2009
Installation date has to be considered for depreciation under companies act and Production date has to be considered for income tax purpose.
21 October 2009
depreciation will be allowed if the assessee fulfills the two conditions: 1. assessee owns the assets 2. the assets is used for the purpose for business or profession in the year of acquisition.
in your case we have to decide what is the meaning of assets used for the purpose of business or profession. (ie whether the date of installation 1.02.01 or the date of commercial run 1.05.01.) (date of purchase & date of inaugration is irrelevant in this case)
as per decided case laws use word includes ready to use. therefore as soon as the asset is ready to use as well as owned by the assessee, depreciation can be charged.
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