Computation of written down value of block of assets of Venus Ltd. as on 31.3.
2024
Particulars Plant & Machinery (₹ in lacs)
Written down value (as on 31.3.2023) 30.00
Less: Depreciation including additional depreciation for P.Y.
2022-23 4.75
Opening balance as on 1.4.2023 25.25
Add: Actual cost of new assets acquired during the year
New machinery purchased on 1.9.2023 10.00
New machinery purchased on 1.12.2023 8.00
Computer purchased on 3.1.2024 -
43.25
Less: Assets sold/discarded/destroyed during the year 0.00
Written down value (as on 31.3.2024) 43.25
Computation of Depreciation for A.Y. 2024-25
S. No. Particulars
I.
Assets put to use for more than 180 days, eligible
for 100% depreciation calculated applying the
eligible rate of normal depreciation and additional
depreciation
Normal Depreciation
- WDV of plant and machinery
- New Machinery purchased on 1.9.2023
(A)
Additional Depreciation
New Machinery purchased on 1.9.2023
Balance additional depreciation in respect of new
machinery purchased on 31.10.2022 and put to use
for less than 180 days in the P.Y. 2022-23
(B)
II.
Assets put to use for less than 180 days, eligible
for 50% depreciation calculated applying the
eligible rate of normal depreciation and additional
depreciation, if any
Normal Depreciation
New machinery purchased on 1.12.2023
d. as on 31.3.2024 Computer purchased on 3.1.2024
Computer (₹ in lacs) (C)
0.00 Total Depreciation (A+B+C)
-
Notes:
(1) As per section 32(1)(iia), additional depreciation is allowable in the case of any new
- or plant acquired and installed after 31.3.2005, by an assessee engaged, inter alia, in
- of manufacture or production of any article or thing, at the rate of 20% of the actua
4.00 machinery or plant.
4.00 However, additional depreciation shall not be allowed in respect of, inter alia,
0.00 (i) any office appliances or road transport vehicles;
4.00 (ii) any machinery or plant installed in, inter alia, office premises.
In view of the above provisions, additional depreciation cannot be claimed in respec
(i) Machinery purchased on 1.12.2023, installed in office and
(ii) Computer purchased on 3.1.2024, installed in office.
(2) Balance additional depreciation@10% on new plant or machinery acquired and put
than 180 days in the year of acquisition which has not been allowed in that year, sh
in the immediately succeeding previous year.
Hence, in this case, the balance additional depreciation@10% (i.e., ₹1 lakhs, being 10% of ₹
lakhs) in respect of new machinery which had been purchased during the previous year 20
put to use for less than 180 days in that year can be claimed in P.Y. 2023-24 being immedia
succeeding previous year.
n of Depreciation for A.Y. 2024-25
Plant & Machinery (₹ in lacs) Computer (₹ in lacs)
3.79 -
1.50 -
5.29 -
2.00 -
1.00
3.00
0.60 -
- 0.80
0.60 0.80
8.89 0.80
eciation is allowable in the case of any new machinery
.2005, by an assessee engaged, inter alia, in the business
cle or thing, at the rate of 20% of the actual cost of such
ot be allowed in respect of, inter alia,
ter alia, office premises.
al depreciation cannot be claimed in respect of -
nstalled in office and
talled in office.
n new plant or machinery acquired and put to use for less
which has not been allowed in that year, shall be allowed
eciation@10% (i.e., ₹1 lakhs, being 10% of ₹ 10
een purchased during the previous year 2022-23 and
n be claimed in P.Y. 2023-24 being immediately
Where an assessee is engaged in the composite business of growing and curing of coffee, the income
will be segregated between agricultural income and business income, as per Rule 7B of the Income-
tax Rules, 1962.
As per the above Rule, income derived from sale of coffee grown and cured by the seller in India
shall be computed as if it were income derived from business, and 25% of such income shall be deemed
to be income liable to tax. The balance 75% will be treated as agricultural income.
Particulars ₹ ₹ ₹
Sale value of cured coffee 2,200,000
Less: Expenses for growing coffee 310,000
Car expenses 40,000
Depreciation on car [See Computation
below] 36,000
Total cost of agricultural operations 386,000
Expenditure for coffee curing operations 300,000
Add: Depreciation on machinery [See
Computation below] 225,000
Total cost of the curing operations 525,000
Total cost of composite operations 911,000
Total profits from composite activities 1,289,000
Business income 322,250
Agricultural income 966,750
Computation of depreciation for P.Y. 2023-24
Particulars ₹ ₹
Car
Opening balance as on 1.4.2023 (i.e., WDV as on
31.3.2023 (-) depreciation for P.Y. 2022-23) 300,000
Depreciation thereon at 15% 45,000
Less: Disallowance @20% for personal use 9,000
Depreciation actually allowed 36,000
Machinery
Opening balance as on 1.4.2023 (i.e., WDV as on
31.3.2023 (-) depreciation for P.Y. 2022-23) 1,500,000
Depreciation @ 15% for P.Y. 2023-24 225,000
Explanation 7 to section 43(6) provides that in cases of 'composite income', for the purpose of
computing written down value of assets acquired before the previous year, the total amount of
depreciation shall be computed as if the entire composite income of the assessee (and not just 25%) is
chargeable under the head "Profits and gains of business or profession". The depreciation so
computed shall be deemed to have been "actually allowed" to the assessee.
d not just 25%) is
