DEPRECIATION UNDER INCOME TAX ACT.

SANJIV BATRA (Querist) 24 August 2010 This query is : Resolved
MR.X IS A PROPRIETOR OF A SOLE PROPRIETOR SHIP FIRM M/S XYZ. HE PURCHASES A PROPERTY IN THE NAME OF (1) MR.X SOLE PROP.M/S XYZ INSTEAD OF (2) M/S XYZ SOLE PROPRIETOR MR.X.

IS HE ELIGIBLE TO PURCHASE THE PROPERTY IN HIS NAME ALONGWITH HIS SOLE PROPRIETOR SHIP FIRM NAME AS MENTIONED (1) AND CLAIM DEPRECIATION UNDER INCOME TAX ACT. I THINK THAT MR.X CAN CLAIM DEPRECIATION UNDER BOTH THE CASES. PLEASE CLARIFY.

THANKS

SANJIV BATRA

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A V Vishal (Expert) 25 August 2010
There is no bar either ways since both the individual & proprietor are one and the same. However, note that the property must be used as a business asset and not as personal and further if it is used partly for business and partly for personal use then propotionate depreciation must be claimed.

s.subramanian (Expert) 25 August 2010
Yes. I agree with Mr.Vishal.

VENKATRAMAN SHRINIVAS (Expert) 25 August 2010
As observed by Mr.Vishal, the individual and the proprietry concern are one and the same, from the given set of facts. The property if only put to use as a business asset and is a tool of the trade, depreciation under the Income-tax Act is admissible.