Treatment of car returned

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This query is : Resolved

Faheem Ansari (Querist)

22 June 2013 Dear,

I had purchased a new car for Rs. 44,68,080.00 on Jan. 2013 by returning my old car which was purchased at cost of Rs. 35,19,609.00 on March 2010.
Due to some technical problem, I returned the earlier car purchased and buy another.
Now, I had charged depreciation on the returned assets in the books, is there any need also to deduct the amount of accumulated depreciation and cost of assets from the balance sheet.
What is the treatment of loss on sale of Car as the case is of a Public Limited Company.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

23 June 2013 As per Income-Tax Act you have to deduct the amount realised/taken into consideration by returning the old car from the opening WDV of the block of Assets and add the cost Rs. 4468080/- in the block. On the block value so arrived you will have to provide depreciation.
.

Soumitra Basu

Soumitra Basu (Expert)

24 June 2013 The difference between the books value and sale value of assets will have to be treated either as Profit on sale of asset or loss on sale of asset.
In income tax the advise of Mr. Bafna is correct.

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