Samode Power Generation Ltd an electricity company charging depreciation on straight line method (SLM) on each asset separately, sells one of its machinery in June, 2020 for ₹3,40,000. The WDV of the machinery at the beg

CS Executive · Tax Laws · PYQS · December 2021
Samode Power Generation Ltd an electricity company charging depreciation on straight line method (SLM) on each asset separately, sells one of its machinery in June, 2020 for ₹3,40,000. The WDV of the machinery at the beginning of the year on 1st April, 2020 is ₹3,70,000. No new machinery was purchased or added during the year 2020-21. The shortfall of ₹30,000 between the sale value and the WDV of the machine shall be treated as:
(A) Short-term capital loss
(B) Normal depreciation
(C) Terminal depreciation
(D) Business loss

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Income Tax Act, 1961

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