Whether difference of rs. 66893/- between book value rs. 29471.94 and wdv 96364.94 in blockis taxab

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 17 January 2019

Yes, taxable under head capital gain since no assets left in block.

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Mamad,

Thanks with regard for attending my query. But due respect to you, as per IT Act there is no balance in wdv and no asset left in that block , so there will be no capital Gain. But

iii Profit on sale of fixed assets under Other income Rs.66893 is to be shown in P & L Schedule, and thus it is included in total profit at point no. 45 of ITr, i require guidelines whether it will be in Schedule BP in ITR from where to deduct Rs. 66893/- ? will it be written in capital gain column at A3b or at exmpt at 5 c i or somewhere else ?

please guide, so i can understand clearly.

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Madam,

Rs.66893 is not balance of the wdv in block of depreciation, there is zero, as the sale consideration and opening balance is equal i.e. Rs. 96364.94.

Rs.66893 of profit is balance in books as sale consideration is Rs. 96364.94 and book value after dep as per Companies act is Rs. 29471.94 at the beginning of the year i.e. 01.04.2016

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 18 January 2019

When no assets are left in block of assets: If the whole of the capital assets forming part of a block of assets have been sold during a year and the assessee has suffered a loss after deducting the net sale consideration from the written down value of the block of assets then such loss shall be treated as short term capital loss and no depreciation shall be allowed from such block of assets.

It was decided by Chandigarh tribunal in (2004) 3 S.O.T. 521/ 83 T.T.J. 1057 if the whole of capital assets in a block have been sold in a year and some gain arises after the sale such gain shall not be treated as short term capital gain if some new asset has been purchased within the same year in the same block of assets and the total value of new and old capital assets in the same block is more than the sale consideration of the assets sold, since the block of asset does not cease to exist in such case as is required u/s 50(2).

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Madam,

Ok. as per you also there will not be any capital Gain as wdv is zero and no asset is left in that block.

But what about iii Profit on sale of fixed assets under Other income Rs.66893 is to be shown in P & L Schedule, and thus it is included in total profit at point no. 45 of ITr, i require guidelines whether it will be in Schedule BP in ITR from where to deduct Rs. 66893/- ? will it be written in capital gain column at A3b or at exmpt at 5 c i or somewhere else ? please guide,

this Rs. 66893/- is automatically included in Schedule business and profession, so what treatment to be given it ?

(Guest)

Are you saying that as per Income tax act depreciation, there is no capital gain? (may be because the rate was lower)

The capital gain 66893/-is only as per companies Act depreciation and hence it comes in profit and loss account? (because the rate was higher)

is that the case?

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Madam,

exactly i want guidelines of this "The capital gain 66893/-is only as per companies Act depreciation and hence it comes in profit and loss account? (because the rate was higher)"

(Guest)

5C of BP and in EI too.

Not sure about this.

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Madam,

please let me know from where exact can be got.

Thanks with regards for attending my query

MADHU MITTAL (DIRECTOR) (192 Points)
Replied 18 January 2019

Respected Sirs/Madams,

at least please let me know whether Rs. 66893/- will be deducted from profit -Computation of income from business or profession as per item 45 of Rs. 180295/-. i.e. suppose there is no other items Computation of income from business or profession other than profit Rs. 180295/- ,then profit -Computation of income from business or profession will be Rs. 180295-66893=113399/-

Computation of income from business or profession

1 Profit before tax as per profit and loss account (item 45 and 53d of Part A-P&L) 1 180295

please guide,

thanks with respect

	CREDITS TO PROFIT AND LOSS ACCOUNT

1	Revenue from operations
2	Other income
iii	Profit on sale of fixed assets	iii	66893

45	Profit before taxes (42-43iii-44)	45	180295



Schedule BP	Computation of income from business or profession

1	Profit before tax as per profit and loss account (item 45 and 53d of Part A-P&L)	1	180295

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	roc book value	wdv as per IT return
wdv/b.v as on 01.04.2016	29471.94	96364.94

sold during fy 2016-17	96364.94	96364.94

profit	-66893	0