Depreciation on Car owned by Directors which is used in Company

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Jagruti Khurana (Querist)

11 April 2016 Dear Sir there are two issues 1. Car is given to the company for use 2. Loan and interest on loan of car are paid through income of the director. i.e. not paid by the company now my question is 1. car given to the company can be said transfer in the meaning of S.2(47) of Income Tax Act, 1961 for capital gain purpose. 2. will company be allowed to claim depreciation on the same on the basis of Usage by company please help

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

11 April 2016 Company cannot claim depreciation since car is not the asset of company. Company can claim running and maintenance Exps if it is used for company.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

11 April 2016 1, Not a transfer to fit in 2(47).

2. Depreciation can't be claimed since purchased by loan of director.
Inference :- CIT Vs. Aravali Finlease Ltd [2012] 341 ITR 282 [Guj].

Jagruti Khurana

Jagruti Khurana (Querist)

11 April 2016 thanks sir

Jagruti Khurana

Jagruti Khurana (Querist)

11 April 2016 so sir should it be in BS of director to claim depreciation. is it? because loan of car is paid from saving bank account of director

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

11 April 2016 No, when car not used for his business, question of depreciation not arise, only he can reduce the value of asset.

Jagruti Khurana

Jagruti Khurana (Querist)

13 April 2016 thanks a lot