Actual Cost u/s 43(1)

Plz explain your case through an example. And reason of nil wdv alongwith nature of assets whether it is

a assets for the purpose of Research & Developement or otherwise.

You have to take Subidy as an Income of the year of its receipt.

e.g. subsidy received against P&M the block of which is negligible, if not nil. If the subsidy was received before the asset  was put to use, it would have been reduced from the cost of asset. But now the subsidy is received after the asset is used for many years and the block is near to nil. What will be the treatment?

@ Mr. Paras - Pls give the support to ur ans that we have to take it as an income in the year of receipt of subsidy.

Under the other method, grants related to depreciable assets are treated as deferred income which is recognised in the profit and loss statement on a systematic and rational basis over the useful life of the asset. Such allocation to income is usually made over the periods and in the proportions in which depreciation on related assets is charged. Grants related to non-depreciable assets are credited to capital reserve under this method, as there is usually no charge to income in respect of such assets. However, if a grant related to a non-depreciable asset requires the fulfillment of certain obligations, the grant is credited to income over the same period over which the cost of meeting such obligations is charged to income. The deferred income is suitably disclosed in the balance sheet pending its apportionment to profit and loss account. For example, in the case of a company, it is shown after 'Reserves and Surplus' but before 'Secured Loans' with a suitable descripttion, e.g., 'Deferred government grants'.

https://www.icai.org/eac/eacfinal/vol3/14.htm

this link is Accounting treatment of capital based grant.

might be helpful.

I am asking under Income tax Act.