Depriciation on asset purchased but returned

This query is : Resolved

varun gupta (Querist)
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05 May 2009 A company purchases an asset in one financial year say in Dec 07 for Rs 1 lakh but returns it to vendor in next financial yr say July 08 for Rs 95000 due to poor quality. How it should have calculated depriciation in both yrs and how shd it treat the VAT input credit it has taken while purchasing the asset?

C.A.Javid Patel

C.A.Javid Patel (Expert)
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05 May 2009 1. the depreciation whatever her has chargrd should be reverse at prior period income.

2. and the vat credit taken should be reveresed in this year and requirtedpayment to goovernment.