Under income tax act, in case of depreciable assets the selling expenses on account of transfer of such asset is treated differently from the normal accounting rules in the following situations:

Normally, on transfer of asset we reduce the sale consideration by the amount of selling expenses (commission etc.) but where the transfer of depreciable asset does not result in extinction of the block in which case short term capital gain/loss arises – under section 50, the amount of selling expenses shall not be adjusted from the Block of Asset i.e only gross sales consideration should be reduced from the block.

The amount incurred as selling expenses on such transfers is allowable under section 37(1) as revenue expense.