Section 35 r.w. Sec 41(1)

Dear Sandeep Goyal 

If a scientific research asset ceases to be used as scientific research asset and used in normal business operation then it will be added to relevant block of asset with the actual cost taken to be NIL (Actual cost is considered as nil by virtue of Explanation 1 to Clause 1 of Section 43).

And if that asset is sold in the future, the value of the block will be reduced by the sale value of asset.

See, there are two treatments

1. When scientific research asset is sold after being used for normal business operation.

In this case, when the scientific research asset is used for normal business operation, the assets would have been made a part of the block of the asset when it ceases to be used for scientific research with a nil value as per Explanation 1 to Sec 43(1) and when the scientific research asset is sold, the money receivable will be reduced from bock of the asset as per Section 50.

2. When the scientific research asset is sold without having been used for the purpose of business.

In this case, As per Sec 41(3), PGBP = Sale Price or Deduction Claimed earlier, whichever is less.

And capital Gain will also arise if the Sales price is greater than the cost of the asset.