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Profit on sale of fixed asset

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(Querist)
22 August 2011 M/s XYZ Pvt. Ltd. has earned a Profit on sale of a Machinery (purchased in 2007 and sold in 2010). What is the treatment of the same in Income Tax?
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Ravi Jhamb

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Ravi Jhamb (Expert)
23 August 2011 it is treated as Capital profit and will show in P/L a/c. the assets will reduced by the book value
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CA PARAS BAFNA

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CA PARAS BAFNA (Expert)
23 August 2011 For the purpose of Income Tax, You have to first see that whether there are other Machines exist in the same block.
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You can deduct the sales consideration from the WDV of the Block after considering Additions in the block.
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In case there is no other asset in the block , the difference will be treated as STCL or STCG. Section 50.
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The treatment given in above by the expert Shri Ravi, ca be adopted in the Books.
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
23 August 2011 I agree with both the experts
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Devendra

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Devendra (Querist)
23 August 2011 What is the rate of tax for STCG realised on sale of machinery by a Company?


Thank You
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CA PARAS BAFNA

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CA PARAS BAFNA (Expert)
23 August 2011 STCG is taxed as the normal profits of the company are taxed.
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