Computation of proft on transfer of a business capital asset.
42. (1) The amount of profit, where a business capital asset, which forms part of a block of assets specified in the Fifteenth Schedule, is transferred discarded, destroyed or destructed shall be computed in accordance with the formula-
A-(B+C)
Where A = the amount accrued or received in respect of such asset, which is transferred, discarded, destroyed or destructed during the financial year together with the amount of scrap value, if any;
B= the amount of written down value of such block of assets at the beginning of the financial year;
C= the actual cost of any asset falling within that block of assets, acquired during the financial year;
(2) The profit referred to in sub-section (1) shall be treated as 'nil', if the net result of the computation, thereunder, is negative.
(3) The amount of profit, where a business capital asset other than that referred to in sub-section (1) is transferred, discarded, destroyed or destructed, shall be computed in accordance with the formula-
|
A-B |
|
Where |
A = |
Amount accrued or received in respect of the asset which is transferred, discarded, destroyed or destructed during the financial year together with the amount of scrap value, if any; |
|
|
B= |
The actual cost of the asset. |
