Actual cost for depreciation

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samir ghosh (Querist)
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08 May 2012 Mr X has 2 business in his sole proprietorship. A machine is transferred from One business to another . (say from business 'A' to business 'B'). What will be the actual cost of that machine to be added in the relevant block of asset in business 'B' ? What will be the amount to be deducted from the relevant block of assets in Business 'A' ?

prasad

prasad (Expert)
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09 May 2012 since, for both businesses proprietor is common, one has to transfer the machines at WDV from one business to another and shall be deducted from the block of asset of Transferor's books of account. (in the above case from A)

Prakash Kochar

Prakash Kochar (Expert)
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09 May 2012 Agree with reply of expert.
to add more-Will be entitle for depreciation calculated on WDV as per IT return, whatever may be book value even if not properly accounted in earlier year/s.

samir ghosh

samir ghosh (Querist)
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11 May 2012 Thanks for reply..
Is there any specific provisions for that is income tax act. There is sec 43(1)and its explanations for notional cost of the actual assets in different situations.
But I didnt find any provisions in the income tax act for computing notional cost of the asset in case of transfer from one business to another in same proprietorship.

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Prakash Kochar

Prakash Kochar (Expert)
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18 May 2012 Use of assets, or book entry from one business to other business of a assessee does not amount to transfer under IT Act. Assessee is entitle for depreciation on WDV of assets even revalued.

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