We seek your expert opinion on the following situation.
We had capitalised machinary around twelve years back for 45,00,000/- We have depreciated this machinary on wdv basis. We have wdv on sale date 2,71,210/- for whole machine. We sold part of the machine in current year for 1,15,000/-
Now to give effect of profit or loss on sold part we need gross value of the particualr part. Pls tell us how to derive the gross value of the machine part which we have sold.
as per IT act the profit or loss on transfer of an asset falling in bolck of asset is under the following conditions
where the entire block of asset is transfered then the differance between the WDV and the recovered value is treated as profit or loss
where any piece of asset is trasfered with out transfering entire block and the recovered amount exceeds the WDV. then the differance will be treated as profit and transfered to pL account. when the remaining assets in the block is later sold the WDV for the asset is NIL and the recoverd amount is profit.
in your case the entire block is not trasfered and the amount recovered is not exceeded the WDV then the recoved amount will reduce the WDV.new WDV 217210-115000
CAclubindia
