Sale of fixed assets

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kanh singh (Querist)
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09 August 2015 A proprietorship concern has a Fixed Assets having WDV of 11000 on 01.04.2014. On 01.12.2014, this assets has been sold for Rs. 27000. Now what should be the accounting treatment as per Income Tax Act if this is the only assets of the firm?

Amol S Joglekar

Amol S Joglekar (Expert)
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09 August 2015 offer 16,000 as short term capital gain

kanh singh

kanh singh (Querist)
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09 August 2015 IF there are other assets in that block, What should be the journal entries for the sale ?

Amol S Joglekar

Amol S Joglekar (Expert)
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10 August 2015 If there are assets having WDV more than 16,000 in the said block, then the said gain is not required to be computed. The same shall get deducted from the value of block of the said asset.

Coming to journal entry : Please note journal entry is passed as per ACCOUNTING principles and therefore dont try to mix up and mess up your time in passing the journal entry as per Income tax.

Journal entry as per accounting principle is same in either case. date 01/12/2014
Debit cash/Bank 27000
Credit the said fixed asset 11,000
Credit Profit on sale of fixed asset 16,000

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