Depreciation
sanjiv batra
(Querist) 27 June 2013
This query is : Resolved
WE HAD PURCHASED A FACTORY BUILDING DURING THE F.Y. 2012-13 (INLUSIVE OF LAND & BUILDING). THERE WAS A COMPOSITE DEAL WITH THE SELLER, NO SEPARATE AMOUNT OF LAND & BUILDING WAS DETERMINED AT THE TIME OF SALE. ONLY LAND AND CONSTRUCTION COST WAS MENTIONED IN THE SALE DEED FOR THE PURPOSE OF DETERMINED STAMP DUTY AS PER CIRCLE RATE. (1) SHOULD WE CHARGE DEPRECIATION ON FULL AMOUNT? (2) IF ON FACTORY BUILDING ONLY HOW WE WILL BIFERCATE THE FULL AMOUNT IN LAND AND BUILDING HEADS?
THANKS
SANJIV
ajay sethi
(Expert) 27 June 2013
consult your chartered accountant or raise query in ca club india .com
Rajendra K Goyal
(Expert) 27 June 2013
Agreed with the expert.
However, on land no depreciation is allowed.
On building portion it is to be provided as per Income tax rules.
You can not charge depreciation on land portion.
prabhakar singh
(Expert) 27 June 2013
.Q.(1) SHOULD WE CHARGE DEPRECIATION ON FULL AMOUNT?
ANSWER: Nop! yOu can NOT!
Q.(2) IF ON FACTORY BUILDING ONLY HOW WE WILL BIFURCATE THE FULL AMOUNT IN LAND AND BUILDING HEADS?
ANSWER: CONSTRUCTION COST WAS MENTIONED IN THE SALE DEED FOR THE PURPOSE OF DETERMINED STAMP DUTY AND THAT IS THE AMOUNT ON WHICH
DEPRECIATION WOULD BE ALLOWED AS PER THEIR RULES.
