Depreciation

This query is : Resolved

Hardeep Singh (Querist)
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03 February 2016 Respected sir
plz provide your valuable opinion on the issue that when an asset forms part of the block of assets? Suppose an asset is purchased but not put to use in the Same previous year then whether for the purpose of calculating closing WDV u/s 43(6), the actual cost of such unused asset shall be included or not?
if the same is includible then whether for the purpose of computing the depreciation on closing WDV, the actual cost of such asset shall be ignored.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 February 2016 1. The asset which has not been put to use will be included for calculating closing WDV. Section 43(6)(c) defines the WDV for block of assets. The cost of assets acquired during the year shall be added to the opening WDV. Here the condition is only acquisition, and not put to use.

2. For computing depreciation the cost of the asset which was not put to use shall be excluded and depreciation shall be calculated on the balance amount.