Concept of block of asset

gauravsaini (AUDIT ASSISTANT) (28 Points)

25 March 2013

ASSESSE HAS FOUR TEMPO AND THEIR OPENING BALANCES

OPENING BAL: 1. 303100 SALE 165000 loss 138100

2. 225017 sale 132000 loss 93014

3. 478887 sale 385000 loss 93887

4. 401017

TOTAL 1408021

SALE 682000

BALANCE OF BLOCK 726021

BUT ONLY ONE TEMPO IS IN BLOCK WHICH HAS WDV IS RS 401017

NOW WHAT WILL BE THE TREATMENT OF THIS

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3 Replies

RAVITOSH KUMAR (Executive) (324 Points)
Replied 25 March 2013

in Block of Asset concept assets loose their individual identity and depreciation is accounted on the balance of the block as at the year end.

The depreciation should be calculated on 726021, and no further treatment is required untill and unless either no asset is left in the block or where sale consideration of any or all assets in the block exceeds the WDV of the Block.

Rahul Suneja (CA-Final, CS-Exec) (215 Points)
Replied 25 March 2013

In this Case there will not be any special treatment, The Block of asset shall continue to exist and Deprecaition shall be charged on the Balance of Block for the whole year at the applicable rate. No treatment for the amont of loss being incurred. Also the assesse has option to pay tax on presumptive basis u/s 44AE of Income Tax Act.