A machine owned by AB & Co. was transferred to XYZ & Co. on 1st January, 2019 for ₹ 5 lakh of which actual cost and WDV was ₹ 3 lakh and 2 lakh respectively. However, the fair market value on the date of transfer of machine was of ₹ 4 lakh. XYZ & Co. will be allowed depreciation on such machine by taking value thereof at
A. 5 lakh
B. 2 lakh
C. 3 lakh
D. 4 lakh
Answer:A
A machine owned by AB & Co. was transferred to XYZ & Co. on 1st January, 2019 for ₹ 5 lakh of which actual cost and WDV was ₹ 3 lakh and 2 lakh respectively. However, the fair market value on the date of transfer of machine was of ₹ 4 lakh. XYZ & Co. will be allowed depreciation on such machine by taking value thereof at
A. 5 lakh B. 2 lakh C. 3 lakh D. 4 lakh