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Deductions u/s 35 AD

Direct Taxation

Where in respect of any asset on which deduction u/s 35 AD has been availed and such asset is destroyed or transferred within a period of 8 years,then is it necessary to reverse the deduction? Am asking a case where such asset is not used for any other purpose other than 35 AD business after such transfer?

Bhaghya Rajesh

CA Inter

★ 910

30-Oct-21 20:07

255

Answers (3)

If asset is used for a purpose other than the specified business during the period specified, The total amount of deduction so claimed as reduced by the amount of depreciation allowable in accordance with the provisions ofÂ sec 32 as if no deduction under this section was allowed, shall be deemed to be the income of the assessee

Yoga Vishnu

CA Final

★ 11K+

31-Oct-21 09:13

How many years depreciation has to be provided?

Thread Starter

Bhaghya Rajesh

CA Inter

★ 910

31-Oct-21 09:15

Suppose in 2019-20, assessee claimed 100 percent deduction under 35AD. In 2020-21, asset was transferred. In this case, income is Deduction allowed less depreciation pertaining to 2019-20 for that asset assuming 35AD is not applicable.

Yoga Vishnu

CA Final

★ 11K+

31-Oct-21 09:25