depreciation and capital gain

This query is : Resolved

UNNATI BHOJAK (Querist)
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18 May 2011 hello all,
plz help me regarding my below query,, thank q in advance...

one company has purchased new asset. biils in its name now within same year transferred to other company..

so how depreciation to be charged in which company..

income tax application also...

if possible plz explain with numarative figures

CA Navin Jain

CA Navin Jain (Expert)
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18 May 2011 Hello Unatti,

Suppose computer has purchased on 01.04.2010 of1000. and same has sold on 30.4.2010 for900 and company has charged depreciation on wdv as per companies act.

Transaction as per Companies ACT

FA - DR - 1000
TO BANK- 1000

DEPRECIATION - DR- 33.33 (1000*40%/12MONTH)
TO FA- 33.33

BANK - DR- 900
LOSS ON SOLD OF FA- DR 66.67
TO FA- 966.67

Note;- As per companies act depreciation is calculated on day basis.

Treatment as per Income Tax Act.

Depreciation is calculated on closing wdv of block of assets.

Suppose Opening wdv is10000
Purchase 01.04.2010-1000
sold 30.04.2010 -900

Deprecation to be calculated on10100 @ 60%

And is there is no opening Wdv then short term capital gain would be100 and depreciation amt would be nil as per income tax act

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UNNATI BHOJAK

UNNATI BHOJAK (Querist)
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18 May 2011 navin sir,
first of all thank u for reply
but another issue is involved here which i didnt mention is that the purchaser company has tranferred the assets to a sister concern. now the invoices of assets are in the name of original purchaser and then transferred then can it claim dep as per income tax.
plz provide me with particular provision also
thank u so much again
have a nice time

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