Tag Archives: Depreciation

Capital expenditure incurred in cash : Depreciation Disallowed w.e.f AY 2018-19

By | June 12, 2018

Capital expenditure incurred in cash : Depreciation Disallowed CIRCULAR No. 2/2018 Dated 15.02.2018 20. Disallowance of depreciation under section 32 and capital expenditure under section 35AD on cash payment. 20.1 Sub-section (3) of section 40A of the Income-tax Act provides that revenue expenditure incurred in cash exceeding certain monetary threshold is not allowable except in such… Read More »

Film Projector could not be treated as computer for charging depreciation : ITAT

By | February 28, 2018

Issue Assessing Officer in disallowing the claim of Depreciation amounting to Rs. 91,87,713/- on the alleged plea that the Film Projector is to be depreciated @ 15% instead of 60%, IN THE ITAT MUMBAI BENCH ‘SMC’ Cinetech Entertainment India (P.) Ltd. v. Income Tax Officer, Ward- 16 (1) (1), Mumbai SHAMIM YAHYA, ACCOUNTANT MEMBER IT… Read More »

Depreciation allowed on landscape expenses on uneven leasehold land

By | April 19, 2017

Held The assessee has incurred the landscape expenses on the leasehold land situated at Sikkim Unit to level the uneven land for construction of factory building. Since the same has been disallowed as capital in nature, the same should be included in the block of building and the assessee would be entitled for depreciation @10%.… Read More »

Depreciation upto only 40% allowed to domestic company u/s 115BA

By | November 10, 2016

MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) Notification No. 103/2016 New Delhi, the 7th November, 2016 Income Tax S.O. 3399(E).-In exercise of the powers conferred by section 32, section 115BA and section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following… Read More »

Depreciation of brand value allowed

By | November 3, 2016

Depreciation of brand value The Chennai Bench of the Income-tax Appellate Tribunal held that a taxpayer is eligible to claim depreciation with respect to a “brand value” The tribunal found that merely because there was subsequent amalgamation was not a basis for finding the taxpayer had not acquired any brand name. When the taxpayer acquired… Read More »

Depreciation of goodwill – Case Law

By | October 20, 2016

Depreciation of goodwill The Bangalore Bench of the Income-tax Tribunal held that the taxpayer cannot claim depreciation on assets acquired through an amalgamation, including goodwill, more than the depreciation that would be allowable to the amalgamating company. The case is: United Breweries Ltd. Read an October 2016 report of KPMG [PDF 315 KB]

Computerized machines are not Computers, 60 % Depreciation not allowed

By | October 13, 2016

Held Increasingly organizations are moving towards computerized integrated manufacturing, where more and more computers, robots, and microprocessors are used in conjunction with the machines. But the machines cannot be called as computers even though computer is an integral and dedicated part of the whole machine. That computer in the machine cannot be used for any… Read More »

No Depreciation on Leasehold rights in land , it not intangible Asset : ITAT

By | July 24, 2016

Held we hold that by virtue of lease only an interest in land is created which does not qualify for allowance e of depreciation. IN THE ITAT BANGALORE BENCH ‘C’ Cyber Park Development & Construction Ltd. v. Deputy Commissioner of Income-tax, Circle 11(2), Bangalore SUNIL KUMAR YADAV, JUDICIAL MEMBER AND INTURI RAMA RAO, ACCOUNTANT MEMBER… Read More »

Useful Lives to Compute Depreciation under Companies Act 2013

By | June 14, 2016

Companies Act, 2013 SCHEDULE II [ Enforced with effect from 1-4-2014.] (See section 123 ) USEFUL LIVES TO COMPUTE DEPRECIATION PART ‘A’ 1. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount of an asset is the cost of an asset or other amount substituted… Read More »

Depreciation on revalued assets allowed to successor if same was allowed to predecessor

By | January 27, 2016

IN THE ITAT MUMBAI BENCH ‘E’ Deputy Commissioner of Income-tax-7 (2), Mumbai v. Suyash Laboratories Ltd. N.K. BILLAIYA, ACCOUNTANT MEMBER AND SANJAY GARG, JUDICIAL MEMBER IT APPEAL NOS. 4003 & 4004 (MUM.) OF 2012 [ASSESSMENT YEARS 2005-06 & 2006-07] OCTOBER  14, 2015 Premanand J. for the Appellant. Vijay Mehta for the Respondent. ORDER N.K. Billaiya,… Read More »

Depreciation is allowed even before the date of Inauguration if the Asset is ready to use : ITAT

By | November 27, 2015

Facts of the Case The assessee-company was engaged in the business of publishing of news papers. As per the Director’s report the company has commenced its business on 27.10.2007. The assessee has claimed depreciation for an amount of Rs.3,45,43,794 which includes depreciation at the rate of 15% amounting to Rs.76,87,348 on opening WDV of plant and… Read More »

ICAI issues Draft Guidance Note on Depreciation under the Companies Act, 2013

By | November 11, 2015

Institute of Chartered Accountants of India (ICAI) has recently withdrawn 5 Guidance Notes, including Guidance Note on Accounting for Depreciation in Companies as per the Companies Act, 1956. Under the Companies Act, 1956, Schedule XIV was dealing with provisions of depreciation. Now, the said Schedule XIV of Companies Act, 1956 has been replaced by Schedule… Read More »

Intellectual property rights come within the definition of ‘plant’ : Supreme Court

By | November 1, 2015

would intellectual property rights such as trademarks, copyrights and know-how come within the definition of ‘plant’ in the ‘sense which people conversant with the subject matter with which the statute is dealing, would attribute to it’? The Supreme Court opines, this must be answered in the affirmative for the reason that there can be no… Read More »