24 April 2009
i was doing audit of pharma. co. which is sole proprietor and here i found that the proprietor had purchase 4 motor vehicles which is maruti wagonr, toyota innova, honda accord and vehicles. all these assets use for business purpose.
now i want to know is all these vehicles allowable to a single proprietor for depreciation.
24 April 2009
What is the accounting treatment for repairs due to an accident on vehicle used for the purpose of company and subsequently some amount recovered from insurance co.
24 April 2009
Rajesh - It is a normal practice to buy vehicles in the name of the business and using them for business and sometimes for personal purpose. The proprietor can avail depreciation on all the vehicles as the vehicles are being used for business purpose.
24 April 2009
if all the assets will allowable for depreciation as per income tax than everyone would buy as much vehicles on loan to avoid tax as he will get deprecitaion and interest on loan.
24 April 2009
You have to prove to the income tax department that all the vehicles are exclusively used for business purpose. such a log book containing day of use kms starting and ending kms place, customer name or purpose. The assessing officer has right to disallow even the depreciation stating that this is not a reasonable expenditure. It depends on the turnover and the requirement of vehicles. We cannnot get the benefit just like that.
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