Block of assets --> asset sold for nil value

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Kunjan (Querist)
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27 September 2025 if 2 items are there in plant block,
opening wdv ac 5000
weighing scale 12000
total op. wdv 17000

AC is sold for just 1000 , , then what is journal entry?

my view- bank debit 1000
loss on sale of asset debit 4000
to ac credit 5000
so in books, closing wdv will be 17000 - 5000 = 13000
What will be income tax return?
op. wdv 17000
addition 0
less sale 1000
---------------------------
closing wdv 16000.
but in income tax closing wdv will be 16000.

my q --> in above case, both closing wdv in books vs income tax is different . Am i correct in closing wdv calcualtion? (assesse is partnership firm)

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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27 September 2025 As per block of assets concept... Rs. 1 K will reduce the block value to 16K; on which the depreciation will be charged.
If you sell some assets but the block's WDV remains above zero, even after subtracting the sale price, no capital gain or loss arises. Depreciation on the remaining assets continues as usual.
Final loss/gain is ascertained on when the block cease to exist.

Kunjan

Kunjan (Querist)
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28 September 2025 ty sir, so in itr, wdv will be
op 17k
addition 0
less sale 1k
-----------
16k (itr closing wdv)
vs
book wdv closing wdv will be 17-5k (loss on sale + 1k receipt from sale) =book closing wdv 12k

can book wdv be different from itr wdv for parternsip firms?

my view--> there has to be a way that book wdv and itr wdv remains same. am i missing something?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 No. Book value will be same as in ITR. You are not allowed for STCL either in ITR or books.
One more.... claim depreciation on the 16K... that will be wdv.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Good luck.....

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