Profit on sale of fixed assets

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RAVI SONI (Querist)
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20 August 2013 Profit on sale of fixed assets credited to profit & Loss A/C the same will be disallowed while computing the taxable income under I. T. Act in the head Business or Profession and the block of fixed assets still exists so there is no question of arising any capital gain.

Please suggest me that under which section this income will be disallowed in Business or Profession

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 August 2013 In case of Income Tax

WDV of Block of assets should be reduced by Sale Value of Asset
Two consequences will exits after this

WDV become negative- Excess over WDV will be treated as short term capital gain u/s 50

WDV & other assets still exist then only bal amt of WDV will qualify for Depreciation.

Therefore profit on sale of particular asset as calculated under Companies Act,doesn't have any influence over Tax computation