| Question And Answer | |
|---|---|
| Subject: | WDV u/s 43(6)(c) |
| Category: | Income-Tax |
| Querist: | Arun Kumar Arora |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Block of assets, depreciation, WDV, Written Down Value |
| Date: | June 7, 2022 |
Opening WDV as on 1-4-2021 Of only Vehicles Block(consisting of Car A-WDV Rs. 1 Lakh and Car B-WDV Rs. 8 Lakhs) is Rs. 9 Lakhs. During the year 2021-22, Car B is stolen. Insurance claim of Rs. 12 Lakhs is received. One new Car C is purchased for Rs. 22 Lakhs during the year 2021-22.What will be the WDV for working out of Depreciation for the year 2021-22 under the circumstances. Also, how these transactions should be booked in Books of Accounts.
The WDV for working out depreciation would be the WDV of the block at the beginning of the year plus additions to the block minus the sales consideration received. In CIT v. Priyadarshini Spinning Mills Ltd. (2014) 366 ITR 563 / 52 taxmann.com 65 (T&AP)(HC) held that Compensation reduction only to the extent value reflected in accounts.