Depreciation on Car owned by Directors which is used in Company
This query is : Open
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
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.
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].
2. Depreciation can't be claimed since purchased by loan of director.
Inference :- CIT Vs. Aravali Finlease Ltd [2012] 341 ITR 282 [Guj].
11 April 2016
thanks sir
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
11 April 2016
No, when car not used for his business, question of depreciation not arise, only he can reduce the value of asset.
13 April 2016
thanks a lot
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