Meaning of written down value and adjusted value of assets.
45. (1) The written down value of any block of assets at the beginning of the financial year shall be the written down value of the block of assets at the close of the immediately preceding financial year.
(2) The written down value of the block of assets at the close of the immediately preceding financial year shall be the adjusted value of the block of assets in the immediately preceding financial year as reduced by,—
(a) the amount of capital allowance, if any, allowed under section 37 during that year; and
(b) any expenditure incurred for acquiring the asset to the extent allowed as a deduction in the financial year under any provision of this Code.
(3) The adjusted value of any block of assets for any financial year shall be computed in accordance with the formula—
(A+B) - (C+D+E)
Where
A= the written down value of the block of assets at the beginning of the financial year;
B = actual cost of any asset falling within the block, acquired during the financial year;
C = moneys receivable in respect of any asset falling within the block, which is sold or discarded or destroyed or destructed during the financial year;
D = amount of the scrap value, if any;
E = the aggregate of the deemed written down value of the assets transferred by any of the modes referred to in sub-section (3) of section 44.
(4) The adjusted value of anys block of assets under sub-section (3) shall be "nil" if the amount (C+D+E) exceeds the amount (A+B).
(5) The adjusted value of the block of assets, acquired by a successor in a business reorganisation, for the financial year in which the business reorganisation has taken place shall be the amount which would have been taken as the adjusted value of the block of assets as if the business reorganisation had not taken place.
(6) The written down value of the block of assets, acquired by a successor in a business reorganization, on the last day of the financial year in which the business reorganisation has taken place shall be determined in accordance with the formula—
A - (B + C)
Where
A = the adjusted value determined under sub-section (5);
B = the amount of deduction allowed to the predecessor under sub-section (2) of section 43 in respect of the block of assets;
C = the amount of deduction allowed to the successor under sub-section (3) of section 43 in respect of the block of assets.
(7) Where a block of assets comprises of any asset acquired in any financial year from a country outside India for the purposes of business and there is variation in liability in respect of acquisition of the asset after the date of such acquisition, the adjusted value of the block of assets shall be computed in accordance with the formula—
A + (B-C) - D
Where
A = the adjusted value of such block of assets determined in accordance with sub-section (3);
B = the amount of liability of the person, expressed in Indian rupees at the time of making actual payment towards—
(a) the whole or a part of the cost of the asset; or
(b) repayment of the whole or a part of the moneys borrowed by him from any person in any foreign currency specifically for the purpose of acquiring the asset;
C = the amount of such liability existing at the time of acquisition of the asset;
D = the whole or any part of the liability met, directly or indirectly, by any other person or authority.
(8) The amount of liability of the person, expressed in Indian rupees at the time of making payment as referred to in sub-section (7), shall, in a case where the person has entered into a forward contract, be computed with reference to the rate of exchange specified in such forward contract.
(9) The Board may prescribe
(a) the method of determining the allocation of the written down value or the adjusted written down value of the assets between the different businesses carried on by the person; and
(b) the method of determining the written down value or the adjusted written down value of the block of assets in the circumstances which are not provided for in this section.
(10) In this section, the deemed written down value shall have the meaning assigned to it in sub-section (10) of section 44.
