Suggestion required

written down value’, as defined in section 43(6) means the ‘actual cost’ of a depreciable asset minus depreciation actually allowed by the assessing officer while computing taxable income under the provisions of the income-tax Act, 1961 and earlier enactments for computation of income for the purpose of income tax levied by the Central Government on income chargeable to the Central income-tax. The  term ‘actual cost’ is defined in S.43(1). In both definitions certain explanations are provided to deem actual cost and WDV in case of certain types of transfer of assets from one person to other, as the actual cost and WDV in hands of the previous owner. These are basically because there is  no actual  consideration flowing from transferee or because of exemptions granted to transferor on transfer of such assets to transferee. Some explanations are for excluding certain costs from ‘actual cost’ and hence from WDV.

It is now very well settled that the key words ‘actual cost’ and `actually allowed’ are the pivot of the meaning of ‘written down value’. Any notional allowance or any allowance merely allowable will not be deducted from the actual cost or WDV unless benefit of depreciation has been actually given effectively in the assessment of taxable income by the Assessing Officer it will not be deducted. For sake of brevity and also in view of regular use of these provisions by readers these meanings are not reproduced entirely. And relevant parts in context of subject matter are only reproduced.