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Pgbp

In the image its mentioned no dep. Allowed fr an assessee if he doesn't own asset but oly uses or hires.. But in ur notes its mentioned in case of hire purchase buyet can claim dep.

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IMG_20210111_175941.jpg


Shru Kanda

Shru Kanda

CA Inter

520

11-Jan-21 18:02

17

Answers (3)

Best Answer

Renting something and using it and Buying something on installments (i.e. hire purchase) is different When you rent something you donâ??t become the owner of that thing. In case of hire purchase, though purchaser becomes the legal owner after paying last installment but all risks and rewards associated with the product are enjoyed by the customer (Substance over legal form, AS1/ICDS1). So, irrespective of the legal form, it is considered as an asset for the buyer. Depreciation for hire purchase assets: Ownership at once transferred (lease): Depreciation to lessee on HP price as per agreement Ownership transferred in the end (hire purchase): Depreciation to hire purchaser on cash price at the date of agreement


Deepak Gupta

Deepak Gupta

CA Inter

760

11-Jan-21 18:21

Well said


evolvo o

evolvo o

CA Inter

3K+

12-Jan-21 08:16

Well explained


Vishnuvardhan Raju

Vishnuvardhan Raju

CA Inter

825

12-Jan-21 13:05