section 32

Depreciation on Land in Case of Composite Purchase Agreements

Income Tax - It is a well known and understood fact that land is not a depreciable asset. By its very definition, depreciation means decrease in the value of an asset through wear and tear, deterioration or obsolescence. While these implications easily apply to buildings or other structures built upon land, the land itself as an asset has no finite li...

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Rates of Depreciation as Per Income Tax Act,1961

Income Tax - Block of Assets :-The expressions Assets and Blocks of Assets w.e.f. 1-4-1999 shall mean a group of assets falling within a class of assets comprising:–Tangible Assets being buildings, machinery, plant or furniture;Intangible Assets being knowhow, patents, copyrights, trademarks, licences, franchises or any other business or commercial ...

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Highlights of Tax concessions announced by FM on 20 Sep 2019

Income Tax - The objective of this document is to summarize all the tax concessions, applicable w.e.f FY 2019-20, announced by Finance Minister, Nirmala Sitharaman with intent to boost the economy and to promote ‘Make-in-India’. Highlights of  Tax Concessions by Finance Minister press Conference on 20 Sep 2019 1. Tax Concessions for Exist...

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Application of Time Value of Money concept to WDV Depreciation Calculation

Income Tax - Depreciation as per written down value method (WDV) has been under the spotlight after the introduction of the Companies Act, 2013. Schedule II of the act mandates to provide depreciation as per useful life of assets using either straight line method or written down value method. This article is on Application of Time Value of […]...

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Allowability of depreciation on Plant and machinery in case of Trial Run

Income Tax - Depreciation under Income tax is governed U/s 32 of the IT Act. The primary condition to claim the depreciation in the assessment year is that a) assets is owned by the assessee & b) assets is used for the purpose of business or profession. Both these conditions are cumulative in nature. Once these conditions are established, assessee is...

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Additional 15% depreciation on Motor Vehicles- No TDS on cash payments by APMCs

Income Tax - Addressing the concerns raised by Agriculture Produce Market Committees (APMCs), it has been decided not to levy the 2% TDS on cash payments above Rs 1 crore made through APMCs, in order to make immediate payments to farmers for their produce. Further to the announcement made by Smt@nsitharaman on 23-08-2019, an additional 15% depreciatio...

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Depreciation in case of slump sale based on proportionate number of days by transferor and transferee company- Clarify legal position- ICAI

Income Tax - The proviso to section 32 provides that the aggregate deduction, in respect of depreciation of buildings, machinery, plant or furniture, being tangible assets or know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, being intangible assets allowable to the predecessor...

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Additional depreciation on Plants & machinery installed in Captive Power Plant

PCIT Vs Kadodara Power Pvt Ltd (Gujarat High Court) - PCIT Vs Kadodara Power Pvt Ltd (Gujarat High Court) It is now a settled position as held by the Hon’ble Supreme Court and the various Co­ordinate Benches of the Tribunal that the process of generation of electricity is akin to manufacture of an article or thing, the assessee in the instant ca...

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Depreciation allowable on non-compete fees: HC

PCIT Vs Ferromatic Milacron India Pvt Ltd (Gujarat High Court) - Where non-resident agents appointed by assessee for procuring export orders did not have permanent establishment in India and their activities as commission agents are being carried out outside India, merely because a portion of the sale to the overseas purchasers took place in India, would not make...

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No depreciation on inflated portion of cost of capital asset

ACIT Vs Educomp Infrastructure & School Management Ltd. (ITAT Delhi) - ACIT Vs Educomp Infrastructure & School Management Ltd. (ITAT Delhi) it is beyond doubt that the relevant capital asset in the form of the building of the assessee corresponding to the expenditure not incurred actually by those two contractors mentioned above, did not come into existence and thu...

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ITAT allows Depreciation on car in partner name

NVR Cinema Vs ITO (ITAT Chennai) - Partnership firm can own assets only in the name of the partners. In the case of the assessee firm, the car is owned in the name of the partner of the firm. If the car is purchased from the resource of the firm or the purchase consideration is credited to the partner’s current account or capital a...

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Treatment of unabsorbed depreciation available on 1-4- 2002

The Principal Commissioner of Income Tax-1 Vs Ankur Protein Industries Ltd. (Gujarat High Court) - The Principal Commissioner of Income Tax-1 Vs Ankur Protein Industries Ltd. (Gujarat High Court) Whether the Appellate Tribunal has erred in law and on facts in allowing carry forward of unabsorbed depreciation following Circular No. 14 of 2001 without appreciating that the amendment to the Finance ...

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CBDT notifies Additional depreciation on Motor car & motor vehicles

Notification No. 69/2019-Income Tax [G.S.R. 679 (E).] - (20/09/2019) - Income-tax (9th Amendment) Rules, 2019 – Additional depreciation on motor cars and motor vehicles shall be allowed in certain conditions- Notification No. 69/2019-Income Tax Dated 20th September, 2019. MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) Notification No....

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Commercial rights in the nature of intangible assets eligible for depreciation

I.T.A. No. 496/Delhi/2014 - (15/04/2015) - A reading of the agreement between STL and the assessee clarifies that a specific amount, i.e., Rs.9 Crores was paid by the assessee to the transferor who owned commercial rights towards the network and the facilities. The consideration was a specific value but for which the network would not have b...

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Amendment in Income Tax Rules Related to Depreciation on Fixed Assets

Notification No. 43/2014-Income Tax - (16/09/2014) - Notification No. 43/2014-Income Tax S.O. 2399(E).—In exercise of the powers conferred by Section 295 read with Section 32 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:— 1. (1) Thes...

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MVAT circular on Issuing of Tax Clearance Certificates

Trade Circular No. 1 T of 2010 - (05/01/2010) - In view of this situation, it is necessary that the procedure for the issuing of such certificates should be standardized. Such certificates are very often required to be produced before various government authorities, local bodies or other bodies etc. for the purpose of tender renewal of licenses e...

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Claim for depreciation- Where required particulars not been furnished

Circular : No. 29-D(XIX-14) [F. No. 45/239/65-ITJ], - (31/08/1965) - Numerous instances have come to the notice of the Board where assessee’s claim for depreciation duly shown in the return was not considered by the Income-tax Officer because books of account produced were not properly maintained and it was necessary to estimate profits by invoking the proviso to ...

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Recent Posts in "section 32"

Depreciation on Land in Case of Composite Purchase Agreements

It is a well known and understood fact that land is not a depreciable asset. By its very definition, depreciation means decrease in the value of an asset through wear and tear, deterioration or obsolescence. While these implications easily apply to buildings or other structures built upon land, the land itself as an asset has no finite li...

Read More
Posted Under: Income Tax |

Additional depreciation on Plants & machinery installed in Captive Power Plant

PCIT Vs Kadodara Power Pvt Ltd (Gujarat High Court)

PCIT Vs Kadodara Power Pvt Ltd (Gujarat High Court) It is now a settled position as held by the Hon’ble Supreme Court and the various Co­ordinate Benches of the Tribunal that the process of generation of electricity is akin to manufacture of an article or thing, the assessee in the instant case satisfy the requirement […]...

Read More

Depreciation allowable on non-compete fees: HC

PCIT Vs Ferromatic Milacron India Pvt Ltd (Gujarat High Court)

Where non-resident agents appointed by assessee for procuring export orders did not have permanent establishment in India and their activities as commission agents are being carried out outside India, merely because a portion of the sale to the overseas purchasers took place in India, would not make assessee liable to deduct tax at source...

Read More
Posted Under: Income Tax |

No depreciation on inflated portion of cost of capital asset

ACIT Vs Educomp Infrastructure & School Management Ltd. (ITAT Delhi)

ACIT Vs Educomp Infrastructure & School Management Ltd. (ITAT Delhi) it is beyond doubt that the relevant capital asset in the form of the building of the assessee corresponding to the expenditure not incurred actually by those two contractors mentioned above, did not come into existence and thus the assessee cannot be entitled for de...

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ITAT allows Depreciation on car in partner name

NVR Cinema Vs ITO (ITAT Chennai)

Partnership firm can own assets only in the name of the partners. In the case of the assessee firm, the car is owned in the name of the partner of the firm. If the car is purchased from the resource of the firm or the purchase consideration is credited to the partner’s current account or capital account then it shall be construed that t...

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Treatment of unabsorbed depreciation available on 1-4- 2002

The Principal Commissioner of Income Tax-1 Vs Ankur Protein Industries Ltd. (Gujarat High Court)

The Principal Commissioner of Income Tax-1 Vs Ankur Protein Industries Ltd. (Gujarat High Court) Whether the Appellate Tribunal has erred in law and on facts in allowing carry forward of unabsorbed depreciation following Circular No. 14 of 2001 without appreciating that the amendment to the Finance Act was prospective? Current depreciatio...

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Depreciation cannot be allowed on non-existing / Impaired asset

Aramark India Pvt. Ltd. Vs DCIT (ITAT Mumbai)

Aramark India Pvt. Ltd. Vs DCIT (ITAT Mumbai) There is no dispute with regard to allowability of deprecation on goodwill, but when you compare the facts of the current year, the question of allowability of deprecation has to be examined, in the light of provision of section 32(1), where it mandates the block of assets […]...

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Company entitled for depreciation on Vehicle registered in name of director

Gold Finch Jewellery Ltd. Vs D.C.I.T. (ITAT Ahmedabad)

Though vehicles were registered in the name of directors of company, beneficial ownership vested with assessee since payment was made for the purchase of vehicles by the assessee. Thus, assessee was duly entitled for depreciation thereon, especially when assessee had claimed other expenses in connection with vehicle and non-disallowance t...

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Depreciation on Cars used for Business cannot be disallowed

M/s. Bhardwaj Construction Co. Vs ACIT (ITAT Delhi)

M/s. Bhardwaj Construction Co. Vs ACIT (ITAT Delhi) As regards to Ground Nos. 11 and 12, relating to disallowance on account of depreciation claimed at Rs. 33,726/- on Cars, the Ld. AR submitted that this disallowance is without any basis. The Ld. AR further submitted that the vehicles have been used for business purposes and […]...

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Depreciation cannot be considered for computing section 14A disallowance

Sudha Apparels Ltd. Vs DCIT (ITAT Kolkata)

Depreciation claimed by assessee under section 32 cannot be considered for the purpose of computing disallowance under section 14A because section 14A deals only with the expenditure and not any statutory allowance, such as depreciation under section 32....

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