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Messages - arijit

#1
An Assessee has a "specific" construction project which is likely to take 3 years to complete. It acquires Plant and Machinery for completing the said project. Thus, the useful life of the Plant and Machinery can be said to be 3 years, at the end of which it is likely to be written off as scrap. The Assessee is following AS-7.

Would like to know
(i) Whether the Plant and Machinery would be depreciated (for Income Tax purposes) at rates specified under the Rules, or, the depreciation can be at higher rate so as to write off the cost of Plant & Machinery over 3 years (which is their useful life)?

(ii) If the Income Tax depreciation rates are adopted, the full cost of the Plant and Machinery would NOT be written off over 3 years, thus there would be a Short term capital loss u/s 50(2). Can such loss be set off against the Contract income (Taxed under the head Business), so that tax is payable on "TRUE" profit/loss of the Contract?

(iii) If the Plant is depreciated over 3 years, is that acceptable under the Income Tax Act read with Rules thereto?

Would appreciated some clarification on the above.

Thanks
Arijit