SANDESH (proprietor) (25 Points)
15 December 2010assessing officer disallowed depreciation and loss on sale of car used for the purpose of business of the firm in which assessee is getting interest remuneration and also directors remuneration please give citations regarding appeal
CA PARAS BAFNA
(Practising CA )
(33423 Points)
Replied 15 December 2010
If in the Block of 15% there is no other asset except the car, and that car has been sold by the assessee, then depreciation can not be claimed by the assessee. However, difference between the WDV and sale price will be treated as Short Term Capital Gain/loss.
If in the Block of 15% there are other assets also then sales consideration will be deducted from the total opening wdv as on 01.04.20xx Plus Additions if any. If Block still have positive value you can provide depreciation . If Block becomes negative then that will be treated as ST Capital Loss.
However, from your question it seems that you have claimed both depreciation and loss on sale of car.
In the year of sale no depreciation is allowed.
CAclubindia
