VEHICLE IN THE NAME OF DIRECTOR
This query is : Resolved
30 May 2009
IF VEHICLE IS PURCHASED IN THE NAME OF DIRECTOR CAN WE CAPITALISE IN THE COMPANIES BOOKS OF ACCOUNT? CAN WE CLAIM DEPRECIATION & INTEREST ON THAT CAR?
30 May 2009
for claiming depreciation;
the asset should be owned by the assessee &
the asset should be put into use for the purpose of business or profession.
Hence the vehicle in your case should be owned by the company.
The ‘assessee’ (for depreciation purposes) is the person who owns the property in question and who is being assessed and the depreciation is to be based on the original cost of such property to such person - CIT v. Buckingham & Carnatic Co. Ltd. [1935] 3 ITR 384 (PC).
some more case laws relevant to this are also available
the asset should be owned by the assessee &
the asset should be put into use for the purpose of business or profession.
Hence the vehicle in your case should be owned by the company.
The ‘assessee’ (for depreciation purposes) is the person who owns the property in question and who is being assessed and the depreciation is to be based on the original cost of such property to such person - CIT v. Buckingham & Carnatic Co. Ltd. [1935] 3 ITR 384 (PC).
some more case laws relevant to this are also available
30 May 2009
A nicely explained reply Ravi. I do agree with your assessment of the the query. Thanks
30 May 2009
The company can claim depreciation provided the money has been paid by the company for the purchase of the car, just the registration is in the name of director.
There is a case law on it.
There is a case law on it.
30 May 2009
Case laws in support of Mr. Nitin's view:-
1)Mohamed Bux Shokat Ali 256 ITR 355 (Raj).
2)Nidhi Transport Corporation 76 CTR 221 (Ker).
1)Mohamed Bux Shokat Ali 256 ITR 355 (Raj).
2)Nidhi Transport Corporation 76 CTR 221 (Ker).
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30 May 2009
i agree with MR. Nitin and MR. Warrier
30 May 2009
As a matter of precaution, The vehicle may be hypothecated in company's favour
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