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CA Anurag Shukla (Querist)
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16 August 2010 an assessee was having block of assets of trucks which he was using for transportation.
During previous year he sold one asset from the block and utilized the money for purchasing new truck.
AO is demanding Capital Gain Tax on its sale so please suggest the treatment.
according to sec 50(1) where the full of consideration regarding the sold asset exceeds
(i) exp. wholly and excl. in connection with such transfer of assets
(ii) wdv of block of assets at the begining of py.
(iii) the actual cost of any asset purchased.

so as far as BOA concept is concerned sec 50(2) is applcable when block ceases to exist.

what is the remedy available.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 August 2010 Since the block of assets do not ceases, the question of capital gains does not arise.Ref :- section 50 of IT Act,1961.
Conversly depreciation has to charged on the block. For this, WDV may be added with the cost of new truck and the sale value of old truck may be deducted therefrom and depreciation is to be charged on the resultant figure.

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