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Quiz for the week (16 Sep 2024):
Lokesh Ltd has two units located in Chennai and Delhi. The unit in Chennai is engaged in manufacture of computer hardware and the unit located in Delhi is engaged in manufacture of automobile parts. Lokesh Ltd decided to demerge Chennai unit to Rahul Ltd. The total WDV of the assets as on 1st April,2023 was Rs.600 lakhs for Lokesh Ltd. You can assume the actual cost Rs.300 lakhs, FMV Rs.250 lakhs (on the date of demerger) and WDV of the assets of Chennai unit as Rs.180 lakhs as on 1st April,2023. Rahul Ltd acquired a new plant for Rs.50 lakhs on 1st November,2023. On 1st December,2023 Lokesh Ltd demerged its Chennai unit for Rs.400 lakhs, which included consideration for assets, receivables, inventory etc. The opening WDV of plant ( i.e. on 1st April,2023) was Rs.800 lakhs for Rahul Ltd.
How much is the depreciation allowable for Lokesh Ltd and for Rahul Ltd for the assessment year 2024-25? Note: Ignore additional depreciation.
Best Answer :
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Particulars
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Rs.in
lakhs
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WDV of assets of Lokesh
Ltd as on 01.04.2023
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600.00
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WDV of assets
transferred to Rahul Ltd on 01.11.2023
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180.00
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Assets retained by
Lokesh Ltd
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420.00
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Depreciation on
retained assets @ 15%
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(A)
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63.00
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Depreciation on assets
transferred to Rahul Ltd
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No. of days the assets
were held by Lokesh Ltd = 244 days
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No. of days assets of
Lokesh Ltd held by Rahul Ltd = 122 days
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Depreciation on assets
held for fraction of year Rs.180 lakhs @15%
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27.00
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Depreciation for Lokesh
Ltd
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(B)
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18.00
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Depreciation for Rahul
Ltd
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(C)
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9.00
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Depreciation on assets
already held by Rahul Ltd Rs.800 lakhs @
15%
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(D)
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120.00
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Depreciation in assets
acquired by Rahul Ltd on 01.11.2023
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Rs.50 lakhs @ 15% x
(used for less than 180 days)
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(E)
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3.75
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Total Depreciation for
Lokesh Ltd (A)+(B)
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81.00
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Total Depreciation for
Rahul Ltd (C)+(D)+(E)
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132.75
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