A Ltd. has some plant and machinery in a block of assets whose written down value on 1st April, 2020 was ₹50,00,000. These assets carry depreciation @ 15% p.a. The company purchased another second-hand machinery belongin

CS Professional · Advanced Tax Laws and Practice · PYQS · June 2021
A Ltd. has some plant and machinery in a block of assets whose written down value on 1st April, 2020 was ₹50,00,000. These assets carry depreciation @ 15% p.a. The company purchased another second-hand machinery belonging to the same block on 31st October, 2020 for ₹16,00,000. The asset was put to use on the same date. On 2nd January, 2021, A Ltd., amalgamated with B Ltd., and the above two assets were transferred to B Ltd., at ₹72 lakhs. Compute the depreciation allowable to A Ltd., and B Ltd., for the Assessment Year 2021-22.

Answer & Explanation:

Computation of Total Depreciation Amount (₹) On ₹50 lakhs @ 15% 7,50,000 On ₹16 lakhs @ 7.5% (used less than 180 days) 1,20,000 Total Depreciation 8,70,000 Apportionment of Depreciation A Ltd. 7,50,000 x 276 / 365 5,67,123 1,20,000 x 63 / 152 49,737 Total 6,16,860 B Ltd 7,50,000 x 89 / 365 1,82,877 1,20,000 x 89 / 152 70,263 Total 2,53,140

Topics: Income Tax Act, 1961

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