Written down value of depreciable asset

For the purposes of different provisions for computation of income under the head “Profits and gains of business or profession”, written down value for the tax year shall be as mentioned in column C of the Table below:— Table Sl. No. Circumstances Written down value A B C 1. In case the asset is Actual cost to the assessee. acquired in the tax year. 2. In case the asset Actual cost to the assessee less depreciation is acquired before actually allowed under this Act or the Income-tax the tax year. Act, 1961. 3. In case of block [(A-D)+ B-C]-E. of assets. Note:–– In column C,— A = the written down value of the block of assets in the immediately preceding tax year; B = actual cost of any asset falling within that block, acquired during the tax year; C = moneys payable together with scrap value, if any, in respect of any asset falling within the block, which is sold, transferred, demolished, destroyed or discarded during the tax year, where “C” shall not exceed (A-D)+B; D = depreciation actually allowed in respect of block of assets in relation to the said immediately preceding tax year; E = in the case of a slump sale, the actual cost of the asset falling within that block as reduced by depreciation allowable from the tax year 1988-1989 onwards, as if the asset was the only asset in the relevant block of assets, which shall not exceed [(A-D)+B-C]. A B C 4. Where any block of asset Written down value in the hands of is transferred by— the transferee company or amalgamated company is the same as written down (a)(i) a holding value in the hands of transferor company company to its subsidiary or amalgamating company, as the case company; or may be, at the beginning of the tax year (ii) a subsidiary in which such transfer took place. company to its holding company and the conditions of section 70section 70(1)(c) and (d) are satisfied; or (b) amalgamating company to the amalgamated company being an Indian company. 5. Where any asset, forming Written down value of block of part of a block of assets is assets–– transferred by a demerged (a) for demerged company (for company to a resulting the immediately preceding tax company. year), shall be the written down value in the immediately preceding tax year as reduced by the written down value of the assets transferred to the resulting company pursuant to such demerger;

Any allowance in respect of any depreciation carried forward under section 33section 33(11) shall be deemed to be the depreciation actually allowed.

Where an assessee was not required to compute his total income for the purposes of this Act for any tax year or tax years preceding the tax year under consideration,— (a) the actual cost of an asset shall be adjusted by the amount attributable to the revaluation of such asset, if any, in the books of account; 15 (b) the total amount of depreciation on such asset provided in the books of account of the assessee in respect of such tax year or tax years preceding the tax year under consideration shall be deemed to be the depreciation actually allowed under this Act for the purposes of this clause; and (c) the depreciation actually allowed under clause (b) shall be adjusted by the amount of depreciation attributable to such revaluation of the asset.

For the purposes of this section, where the income of an assessee is derived, in part from agriculture and in part from business chargeable to income-tax under the head “Profits and gains of business or profession”, for computing the written down value of assets acquired before the tax year, the total amount of depreciation shall be computed as if the entire income is derived from the business of the assessee under the head “Profits and gains of business or profession” and the depreciation so computed shall be deemed to be the depreciation actually allowed under this Act or under the Income-tax Act, 1961.

In this section, “sold” shall have the meaning assigned to it in section 38section 38(6)(a).