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Transfer of capital wip

Tax queries 1263 views 1 replies

Abhishek

Accountant

55 Points Joined May 2009

Dear all,

I am having two Partnership firm, (One partner in common in both the firms) for construction. In One partnership firm We have taken all the bills of Furniture & fixtures, However in last year's balance Sheet it was shown as Capital WIP and accordingly No depreciation was claimed. No projects are there in thi sfirm.

However in the other firm mega project is going on. Now I want to transfer the abovementioned Capital WIP into this firm.

My query is

1. Can I do so? and if Yes How?

2. What will be Income Tax Implications for this transaction.

Thanks in advance

Replies (1)

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

How is furniture your capital work in progress? Both from point of view of tax and accounting

If you have furniture then you must be using it in some building. This means that part of the building can be used and as per EAC opinon depreciation is allowed on this part of the building. So neither furniture nor that PART of building is your capital work in progress and you should be claiming depreciation under income tax act and your books of accounts

If assets will be transferred at cost then there will be no tax implications