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Disallaowance of expenditure

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This query is : Resolved

manoj mahimkar (Querist)
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17 December 2009 An assessee was proprietor of M/s. ABC Enterprises. Later, a private limited company was formed in which the proprietor became the director of the company with his spouce as another director. Further all the assets except car was transferred to the newly formed company. the car was withdrawn and was introduced in the newly formed comapny in subequent year along with the loan taken for the same. Would ITO disallow depreciation as well as interest paid on the loan taken for the same. The director hs passed resolution allowing the said car to be available for the company

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 December 2009 If the car has been transferred in the name of the company then ITO can not disallow depreciation as well as interest. It may be understood as if the company has purchased the car on loan basis.

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