13 March 2010
An assessee had purchased a shop at Rs. 1,60,000/- in 1998. He didnt use it and the shop was lying idle.
In Dec '09 he got engaged in business and started using the shop when the FMV of shop was Rs. 7,00,000/-.
Now the question is at what price should he disclose the shop in balance sheet? At cost or at Fair Market Value as Notional depreciation cannot be assumed since it was not used earlier for business purpose.
13 March 2010
in balance sheet cost will be showed. As FMV is not the value you invested. moreover if you will increase asset your reserve will generate and in individual or firm account it is not allowed. So show cost price
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