Negative block in Depreciation schedule

Nitin (CA Final Student) (78 Points)

26 August 2009  

Hi.. Please help me to solve this.

 

My opening WDV for a block of Plant and machinery is at Rs.1,000/-. During the year, additions to this block for more than 180 days is for Rs.55,000/- and for less than 180 days, its for Rs.35,000/-. But, during the year, an asset belonging to this block is sold for Rs.75,000/-, the individual WDV can not be ascertained, hence entire amount is treated to be the profits on sale.

 

Now, my Opening WDV after additions for more than 180 days and deducting sale value becomes negative. So, how to calculate the depreciation in such case and what will be the Closing WDV with reference to Sec-32? Also, state what will be the implication on Capital gains part.