MAY 2025Inter
X Ltd. sold Plant & Machinery having WDV of ₹60 lakhs to Y Ltd. for ₹75 lakhs (Fair value of ₹75 Lakhs) and the same plant was leased back by Y Ltd. to X Ltd. The lease back is in the nature of operating lease. The treatment will be:
A
(A) X Ltd. should amortize the profit of ₹ 15 lakhs over the lease term.
B
(B) X Ltd. should recognize the Profit of ₹ 15 lakhs immediately.
C
(C) No profit/loss, as fair value is equal to sale price.
D
(D) Y Ltd. should recognize the profit of ₹ 15 lakhs immediately.