insurance and depriciation
This query is : Resolved
16 March 2009
managing director has purchased a vehicle on his name . while company is paying insurance on it and also taking depriciation. Vehicle is used for the purpose of companys business.
Is is a allowable expense of company.
Is is a allowable expense of company.
Rajesh Kumar
(Expert)
16 March 2009
Section 37 starts with "any expenditure incurred". What is relevant is the factum of incurrance of expenditure, it is irrelevant as to in what name the property is there.
For example if office is in the name of some other person, but expenditure incurred in maintenance of office is allowed. Trademark may be owned by some other person, but advertisement expenditure to promote that mark may be allowed as deduction. Thus ownership is not relevant for the purpose of Section 37.
Yes, if the property is in the name of other person, higher burden is on the assessee to establish that the expenditure is for business only.
For example if office is in the name of some other person, but expenditure incurred in maintenance of office is allowed. Trademark may be owned by some other person, but advertisement expenditure to promote that mark may be allowed as deduction. Thus ownership is not relevant for the purpose of Section 37.
Yes, if the property is in the name of other person, higher burden is on the assessee to establish that the expenditure is for business only.
CA.MANOJ LAMBA
(Expert)
16 March 2009
agreed
CA Nitin Wadhwani
(Expert)
17 March 2009
No, depreciation is allowable to the legal owner of the asset only.
In my opinion, the insurance may even be not allowable if there is no written contract for right to use by the company with the director.
In my opinion, the insurance may even be not allowable if there is no written contract for right to use by the company with the director.
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