Died capital loss under block of asset
This query is : Open
18 July 2013
If a uninsured capital asset is lost due to fire and no claim recd then wht will be treatment in block of asset.....?
18 July 2013
No treatment, leave the block as such.
18 July 2013
WDV of asset should adjusted according to Section 43(6)(c) which reads as under
43(6)(c) in the case of any block of assets,—
(i) in respect of any previous year relevant to the assessment year commencing on the 1st day of April, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted,—
(A) by the increase by the actual cost of any asset falling within that block, acquired during the previous year;
B) by the reduction of the moneys payable in respect of any asset falling within that block, which is sold or discarded or demolished or destroyed during that previous year together with the amount of the scrap value, if any, so, however, that the amount of such reduction does not exceed the written down value as so increased; and
[(C) in the case of a slump sale, decrease by the actual cost of the asset falling within that block as reduced—
(a) by the amount of depreciation actually allowed to him under this Act or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922) in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) by the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988 as if the asset was the only asset in the relevant block of assets,
so, however, that the amount of such decrease does not exceed the written down value;]
(ii) in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i).]
Therefore You should adjust your WDV with respect to loss assets
WDV of asset should adjusted according to Section 43(6)(c) which reads as under
43(6)(c) in the case of any block of assets,—
(i) in respect of any previous year relevant to the assessment year commencing on the 1st day of April, 1988, the aggregate of the written down values of all the assets falling within that block of assets at the beginning of the previous year and adjusted,—
(A) by the increase by the actual cost of any asset falling within that block, acquired during the previous year;
B) by the reduction of the moneys payable in respect of any asset falling within that block, which is sold or discarded or demolished or destroyed during that previous year together with the amount of the scrap value, if any, so, however, that the amount of such reduction does not exceed the written down value as so increased; and
[(C) in the case of a slump sale, decrease by the actual cost of the asset falling within that block as reduced—
(a) by the amount of depreciation actually allowed to him under this Act or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922) in respect of any previous year relevant to the assessment year commencing before the 1st day of April, 1988; and
(b) by the amount of depreciation that would have been allowable to the assessee for any assessment year commencing on or after the 1st day of April, 1988 as if the asset was the only asset in the relevant block of assets,
so, however, that the amount of such decrease does not exceed the written down value;]
(ii) in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1989, the written down value of that block of assets in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of assets in relation to the said preceding previous year and as further adjusted by the increase or the reduction referred to in item (i).]
Therefore You should adjust your WDV with respect to loss assets
18 July 2013
Block is not exhausted. Only one asset with in the block is destroyed by fire. Hence no adjustment in the block is required.
18 July 2013
Please allow to me to once check, can I respond you tomorrow?
Please allow to me to once check, can I respond you tomorrow?
18 July 2013
sir warrier u mean to say we wil get depreciation deduction even if that asset doesnt exist in block.....
19 July 2013
Sir Mr. Warrier you are correct
There are two consequence are arise
i)In case any asset is loss/destroyed/damaged and no insurance claims is received, However other assets of block of WDV are exit.
In that no further treatment is needed in WDV, Loss will automatically claimed as depreciation from WDV
ii)In case any asset is loss/destroyed/damaged and no insurance claims is received, further other assets of block of WDV are also not exit.
in that WDV becomes ZERO and treated as Capital loss/Dead Capital No tax treatment.
There are two consequence are arise
i)In case any asset is loss/destroyed/damaged and no insurance claims is received, However other assets of block of WDV are exit.
In that no further treatment is needed in WDV, Loss will automatically claimed as depreciation from WDV
ii)In case any asset is loss/destroyed/damaged and no insurance claims is received, further other assets of block of WDV are also not exit.
in that WDV becomes ZERO and treated as Capital loss/Dead Capital No tax treatment.
23 July 2013
no treatment of loss of assets till block of assets exist.
26 July 2013
whether deduction will be allowed under head "capital gain"..........?
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