Search Results For: 32


QUERY: The main object of the company is to carry on the business of the construction. However, construction business was not carried on. The querist has purchased the wind mill and received the charges for use of electricity. Whether income can be assessed a business income or income from other sources. If income is assessed as income from other sources, the depreciation is allowable?
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From the fact, it is clear that the company has not started construction business but received electricity charges by letting out wind mill; which is presumed to be not business of the company.

QUERY: A HUF was having a house property which was let out and rent was charged under the head ‘Income from House Property’ on which tax was paid. The said property was sold for Rs. 30/- lakhs which the HUF wants to invest in the name of coparcener (daughter). Whether HUF is entitled to get benefit under section 54F of the Income-tax Act, 1961 as coparcener is a part of the HUF?
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According to me no benefit would be available to the HUF if it invests in the name of coparcener. Under section 2 (31) read with section 4 the HUF as well as coparcener are separate assessable entities. This view is supported by the decision of Income Tax Appellate Tribunal, Nagpur Bench in ITO vs. Prakash Timaji Dhangode [258 ITR (AT) 114], where the Tribunal has held as under:

QUERY: If an assessee is owner of different proprietary concerns, can he get the block of assets under same group clubbed for all of his proprietary units or has to work out gain u/s 50 for the sale of assets of one of his unit?
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S. 32 of the Income-tax Act, 1961, provides for a deduction or allowance being made in respect of depreciation of building, machinery, plant or furniture owned by the assessee and used for purpose of his business or profession, [Golcha Properties Pvt. Ltd. vs. CIT [209 ITR 80 (Raj)].

QUERY: S. 40(a)(ia) lays down that the expenditure mentioned therein viz., interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services or payment to a contractor/ sub-contractor on which tax is deductible at source under Chapter XVIIB, but has not been deducted or after deduction not been paid, would not be allowed as a deduction in computing the business income of the payer-assessee till such TDS is paid within specified time limit. Can Assessing Officer disallow the depreciation on the amount capitalized on which no TDS was deducted, for payments made to contractor who is resident?
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Section 40 starts with “notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”: –

(ia) any interest, commission or brokerage, [rent, royalty] fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor,

QUERY: Please enlighten the rate of depreciation applicable to the following items of plant & machinery:–

(i) J.V.C. Machine

(ii) Road Roller

(iii) Crane

They are all movable like trucks run for the business, whether depreciation on block would be @30% or @ 15%?
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Item No. 3(ii) of Part III (Machinery and Plant) of New Appendix I prescribes higher rate @30% of motor buses, motor lorries and motor taxies used in a business of running them on hire.

QUERY: We have two factories, one at Bombay and the other at Delhi. The factory at Bombay is operational. However, the factory at Delhi has been shut for two years with no activity. Are we entitled to claim depreciation on the assets installed there?
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Yes! You are entitled to claim depreciation even on assets that are not used provided they are part of a “block of assets” and the block has been used during the year. The user of the “block” is important and not that of individual assets.