section 32

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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Depreciation: All You Need to Know

Income Tax - The following essay will explain the meaning of depreciation and all the terms around it through a list and contrast the surrounding terms with the main concept of depreciation....

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S. 32 Understanding Depreciation with case laws

Income Tax - Depreciation – a non-cash expenditure allowed under Income Tax Act, 1961 following block concept. Under the block concept, all the assets falling within the same class and subject to same rate of depreciation are clubbed together and considered as single asset. Any alterations to the value of the block have to be strictly in accordance ...

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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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Depreciation on goodwill – the perennial debate

Income Tax - Depreciation on goodwill has been a matter of considerable debate. Although the Supreme Court, in its landmark judgment in the case of Smifs Securities, held that goodwill is an intangible asset within the meaning of section 32 of the Income-tax Act, 1961 (the Act) and depreciation on goodwill is allowable under the section, some judgment...

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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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‘Right to collect toll’ being intangible asset eligible to depreciation U/s. 32(1)(ii)

ITO Vs M/s. Ashoka Highways (Bhandara) Ltd. (ITAT Pune) - Depreciation on right to collect toll being infrastructure and not on toll road, where cost incurred for development and construction of infrastructure facility was a right in nature of intangible asset falling within purview of section 32(1)(ii). Order of AO in amortizing expenditure over period of...

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Depreciation allowable on Right to operate project facility & collect toll charges

DCIT Vs Progressive Constructions Ltd. (ITAT Hyderabad) - DCIT Vs Progressive Constructions Ltd. (ITAT Hyderabad) Expenditure incurred for gaining right to operate the project facility and collect toll charges resulted into an intangible asset eligible for depreciation Conclusion: Expenditure incurred by assessee of Rs.214 crore for creating the project o...

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Depreciation allowable if Factory not run due to stay order by court

PCIT Vs Babul Products (P.) Ltd. (High Court Gujarat) - Where assessee could not run the factory during the year because of stay order of court, otherwise its business was continued, in such a case depreciation was to be allowed....

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Depreciation allowable on public roads by treating as buildings

PCIT Vs GVK Jaipur Expressway Ltd. (Supreme Court of India) - Whether in the facts and circumstances of the case, Hon’ble ITAT was justified in allowing the claim of depreciation on public roads treating the same as building which is not permissible in law?...

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Depreciation on JCB cannot be disallowed merely for Delay in Registration

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) - Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) There is no dispute that the assessee has purchased the JCB machine vide Invoice dated 3rd June, 2011 and delivery was taken on 6th June, 2011. However, the registration of JCB with the RTO was done on 29.08.2011. We further note that in the registration cha...

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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"

‘Right to collect toll’ being intangible asset eligible to depreciation U/s. 32(1)(ii)

ITO Vs M/s. Ashoka Highways (Bhandara) Ltd. (ITAT Pune)

Depreciation on right to collect toll being infrastructure and not on toll road, where cost incurred for development and construction of infrastructure facility was a right in nature of intangible asset falling within purview of section 32(1)(ii). Order of AO in amortizing expenditure over period of facility and allowing the same was reve...

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Depreciation allowable on Right to operate project facility & collect toll charges

DCIT Vs Progressive Constructions Ltd. (ITAT Hyderabad)

DCIT Vs Progressive Constructions Ltd. (ITAT Hyderabad) Expenditure incurred for gaining right to operate the project facility and collect toll charges resulted into an intangible asset eligible for depreciation Conclusion: Expenditure incurred by assessee of Rs.214 crore for creating the project or project facilities had created an inta...

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Depreciation allowable if Factory not run due to stay order by court

PCIT Vs Babul Products (P.) Ltd. (High Court Gujarat)

Where assessee could not run the factory during the year because of stay order of court, otherwise its business was continued, in such a case depreciation was to be allowed....

Read More

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

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...

Read More
Posted Under: Income Tax |

Depreciation allowable on public roads by treating as buildings

PCIT Vs GVK Jaipur Expressway Ltd. (Supreme Court of India)

Whether in the facts and circumstances of the case, Hon’ble ITAT was justified in allowing the claim of depreciation on public roads treating the same as building which is not permissible in law?...

Read More

Depreciation: All You Need to Know

The following essay will explain the meaning of depreciation and all the terms around it through a list and contrast the surrounding terms with the main concept of depreciation....

Read More
Posted Under: Income Tax |

Depreciation on JCB cannot be disallowed merely for Delay in Registration

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur)

Shri.Ram Karan Yadav Vs ITO (ITAT Jaipur) There is no dispute that the assessee has purchased the JCB machine vide Invoice dated 3rd June, 2011 and delivery was taken on 6th June, 2011. However, the registration of JCB with the RTO was done on 29.08.2011. We further note that in the registration charges, the RTO […]...

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Depreciation on Printers, UPS, Scanners, Cash dispenser Hardware & ATM Switch

Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad)

Adarsh Coopertaive Urban Bank Ltd. Vs ACIT (ITAT Hyderabad) ATM is a computer telecommunication device that allows Bank Customers to access banking at places other than the normal bank without having to take the trouble to go to the Bank in person and collect the cash as is done under the conventional method of withdrawing […]...

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Depreciation Eligible on Intangible asset namely Goodwill

KPIT Cummins Global Business Solutions Ltd. Vs Asstt. CIT (ITAT Pune)

Goodwill is an intangible asset under section 32(1)(ii) covered within the expression 'any other business or commercial rights of similar nature' and, therefore, assessee was entitled to claim depreciation on such goodwill....

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Depreciation on IPR cannot be disallowed merely for non use in Manufacturing

Commissioner of income tax Vs Sinochem india co. Pvt. Ltd. (ITAT Delhi)

CIT Vs Sinochem India co. Pvt. Ltd. (ITAT Delhi) The purchase of intellectual property rights by the assess are not disputed. Consideration paid is also not disputed. The nature and character of the intellectual property rights, as noticed in the order passed by the Commissioner of Income Tax (Appeals), are again not disputed. The intelle...

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