A Bolero jeep is theft on 12.07.2012 from a company having its WDV as on 1.4.12 Rs. 1,75,566 and orignal cost of Rs. 5,55,850 (as per companies act), company has received a claim of Rs. 3,55,000 from insurer as on 28.03.2013.
My query is Regarding Tax Treatment of above asset as per income tax Act , please answer with detailed analysis.
Under the I-T Act we follow the block concept in resepct of calculating loss/profit from sale/disposal of FA. So if the block ceases to exists then loss/profit on the block is calculated accordingly and offered for taxation u/s 50B of the I-T Act.
In your case the WDV of the Bolero Jeep will be arived after deducting depreciation from the opening WDV of teh Jeep. the insurance cover received will be credited to the Jeep account.
After recording the above transaction if the WDV ceases to exists then the loss whihc would be a Short term capital Loss or profit whihc would be a Short Term Capital Profit will be calcualted accordigly and offered for taxation.
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