Depreciation on Discarded Asset

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sreenath (Querist)
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16 June 2010 Hi all

we are sold a car for rs 850000 which was acquired on 12/10/2007 for rs 1175420. the same is sold on 31/08/2009 please tell me the accounting treatment ad Depreciation for 2009-10 as per both the Companies Act and Income Tax Act 1956 & 1961. according to me as per IT Act it comes STCL & as per Companies act it Comes STCG. in Accounts we are booked the Depreciation as per the Companies Act Rates so the Car generates Profit, my Question is we are not doing the Business of Cars Sale & ours is a Software Training Company the profit as per Companies act in Which account we want to show Please Clarify me very urgent Pleaseeeeeeeeeeeeeeee!

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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16 June 2010 YOU HAVE TO CLAIM DEP FOR 1/4/2009 TO 31/08/2009 AND THEN CALCULATE WDV AS ON DATE OF SALE ASSUMING IT COMES 750000/ (AS PER BOOKS IE. COMPANY ACT)
NOW YOU HAVE TO MAKE ENTRY PROFIT OR LOSS ON SALE OF FIXED ASSET IN BOOKS.
AS PER ASSUMING WDV THERE IS PROFIT ON SALE RS. 50000/-.

IT WILL BE DEDUCT FROM PROFIT AT THE TIME OF COMPUTATION OF TAX LAIBALITY.

AS PER INCOME TAX , YOU HAVE TO REDUCED BLOCK OF CAR BY SALE VALUE I.E RES. 850000/-.

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