When asset on which depreciation is allowed u/s 32(1)(i) is sold discarded or demolished in a previous year, and if the insurance, salvage, compensation or sale value, as the case may be, receivable in respect of such asset falls short of the written down value, such difference would be allowed as deduction [Terminal Depreciation] u/s. 32(1)(iii). The condition for allowing such deduction is that such deficiency is actually written off in the books of account.
My Query is that what would be the treatment of Short/Long Term Capital Loss in case we are claiming Terminal Depreciation in our books?
CAclubindia
