TMI BlogSection 43(1) - "Actual Cost", Section 43(2) - "Paid", Section 43(3) - "Plant"X X X X Extracts X X X X X X X X Extracts X X X X ..... al cost. Explanations to Section 43(1) Determination of Actual Cost in special cases Expl. to Sec. 43(1) Mode of Acquisition Actual Cost 1 Asset acquired for scientific research subsequently brought into business use Actual Cost less deduction availed u/s 35 . 1A Stock converted into Capital asset and used for Business or Profession Fair Market Value on the date of conversion. 2 Asset acquired by way of gift/will or inheritance Actual cost to the previous owner minus depreciation actually allowed to him. 3 Asset acquired at higher price from any other person using the asset for his business or profession with a intention to claim depreciation on enhanced cost and reduce tax liability Actual cost to be determined by the assessing officer wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken as the actual cost to the amalgamated company. 7A Asset transferred by a demerged company to the resulting Indian company. Actual cost shall be the written down value in the hands of the demerged company. 8 Asset acquired out of borrowed funds Interest on loan borrowed relating to the period after the asset is first put to use shall never form part of actual cost. 9 Asset acquired subject to levy of GST, excise duty or customs duty in respect of which ITC/CENVAT credit is availed. So much of the duty in respect of which a claim of credit has been made and allowed shall not form part of the actual asset. 10 A portion of the cost of an asset acquired is met directly or indirectly by Govt. or any authority or insurance company or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been used for business purpose since its acquisition [AC = Actual Cost] 14 The inventory converted into, or treated as, a capital asset, [clause (via) of section 28 ] which is used for the purposes of business or profession The actual cost of such asset to the assessee shall be the fair market value. SEC 43(2) : MEANING OF PAID Paid means actually paid or incurred according to the method of accounting upon the basis of which the profits or gains are computed under the head Profits and gains of business or profession SEC 43(3) : MEANING OF PLANT Plant includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession but does not include tea bushes or livestock OR BUILDINGS O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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