Amt computation

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Vicky Shah

Student

126 Points Joined September 2013

Hi Frnds, PQR LLP, a Limited Liability Partnership set up a unit in Special Economic Zone (SEZ) in the Financial Year 2010?2011 for production of washing machines. The Unit fulfills all the conditions of Section 10AA of the Income?Tax Act. During the Financial year 2013?2014, it has also set up a Warehousing Facility in a district of Tamil Nadu for storage of Agricultural Produce. It fulfills all the conditions of Section 35AD. Capital Expenditure in respect of Warehouse amounted to ` 75 Lakhs (including Cost of Land of ` 10 Lakhs). The Warehouse became operational with effect for 1st April 2014 and the expenditure of ` 75 Lakhs was capitalized in the books on that date. Relevant details for the financial year 2014?2015 are as follows: Particulars ` Profit of unit located on SEZ 40,00,000 Export Sales of above unit 80,00,000 Domestic Sales of above unit 20,00,000 Profit from Operation of Warehousing Facility (before considering deduction under Section 35AD) 1,05,00,000 Compute Income Tax (including AMT u/s 115JC) payable by PQR LLP for Assessment Year 2015?2016. I wanted to ask that while computing AMT...depreciation of how many years can be claimed as deduction...since warehouse was set up in F.Y 13-14. please Reply As soon as possible... Thanks.

Replies (3)

CA Goutam Sharma

Chartered Accountant in Practice

468 Points Joined June 2011

This one is very similar or exactly the same question as given in CA Final Paper of DT nov 2015. The deduction claimed under 35AD is added back and the amount of Depreciation that would have been charged had there been no allowance under 35AD given to assessee, is allowed as deduction.

Vicky Shah

Student

126 Points Joined September 2013

Thanks Goutam, my question is,

since warehouse was setup in 13-14 , so can assessee get depreciation for f.y 13 - 14 and 14 - 15 , had there been no allowance under 35AD??

Thanks,

Karthik.V.Kulkarni

Chartered Accountant

594 Points Joined December 2012

Depreciation of any asset can be claimed when it is put to use for the purpose of business. Setting up of machineary has little relevance. So as it was put to use for the purpose business from april 2014 deprecition can be claimed only from that time. Though it was set up, it was not usee for purpose of any business and thus depreciation for 2013 - 14 cannot be claimed.