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Car in the name of director and company is claiming deprecia

Hiren (Article) (38 Points)

05 October 2011  

can company claim the depreciation and show car as an asset of the company if the car is registered in the name of director provided proper records are maintained i.e. minutes, rights, beneficiary, etc.


 14 Replies

Devendra (Chartered Accountant) (4765 Points)
Replied 05 October 2011

Only if it possible to prove that the car purchased in the name of the director is being used for the business, only then depreciation can be claimed on the Car.


Regards,

Devendra k

valji (Accounts manager-MBA) (2148 Points)
Replied 05 October 2011

agreee with above if car fully used for the purpose then dep are allowed

CA VISHAL RANA,CS,B.Com,AMFI (Chartered Accountant in Whole Time Practice)   (4354 Points)
Replied 05 October 2011

agree with devendra & valji

RAKESH (Almost CA) (2199 Points)
Replied 06 October 2011

IT IS NOT ALLOWABLE IN THE HANDS OF THE COMPANY . AS THE CONDITIONS STATED IN SEC. 32 IS NOT ADHERED BY THE ASSESSEE. ONE OF THE CONDITIONS STATES THAT IN ORDER TO CLAIM DEPRECIATION THE ASSESSEE MUST BE THE OWNER OF THE ASSET. SO IN MY OPINION IT SHOULD NOT BE ALLOWED IN THE HANDS OF THE COMPANY

RAKESH (Almost CA) (2199 Points)
Replied 06 October 2011

@ DEVENDAR  SIR HOW COME THE ASSET WHICH IS NOT IN THE NAME OF THE COMPANY BE ALLOWED TO CLAIM DEPRECIATION. THEN I CAN EVER SAY THAT ALL MY PERSONAL ASSETS ARE USED FOR THE BUSINESS OF THE COMPANY.

Pawan Kumar (audit manager) (118 Points)
Replied 06 October 2011

Originally posted by : RAKESH


@ DEVENDAR  SIR HOW COME THE ASSET WHICH IS NOT IN THE NAME OF THE COMPANY BE ALLOWED TO CLAIM DEPRECIATION. THEN I CAN EVER SAY THAT ALL MY PERSONAL ASSETS ARE USED FOR THE BUSINESS OF THE COMPANY.

it is nt hard to prove that the car is used for the company purpose

and depreciation can be claimed by the company.  agreed with the above except you sir

nimish solanki (IPCC CLEARED) (108 Points)
Replied 06 October 2011

If the car is registered in name of director (actin as a director) and companies nme is also mentioned than depericiation can be claimed .However if he has purchased it in his own capacity ( nowhere mentioning the companies name) then dep. cannot be claimed.

Aparna Raja K.C (Student) (520 Points)
Replied 06 October 2011

As said...

if the car has be purchsed by the director acing in the capacity of the director of that co. say...

it is registered as..

Mr. X

The Director,c/o. ABC Co.

then co. can claim dep.

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
Replied 06 October 2011

Depriciation not allowed to company.

PUSHKARAJ SURSINGRAO DHOKALE (Article assistant) (24 Points)
Replied 06 October 2011

Along with records n minutes there should be a contract between director and the company stating that the car can be used by director as he is working for the company and that director will not have any objection even if the company disposes the car as it deems fit, Hence in reality the company will be the true owner of the car n can claim depreciation.
 

CA Hardik Bunha (self) (2114 Points)
Replied 10 October 2011

NOT ALLOWABLE AS DEPRECIATION............

COMPANY HAS IT,S SEPARATE LEGAL ENTITY..........

1 Like

Mayank kharbanda (Risk Advisory Services) (409 Points)
Replied 11 October 2011

In CIT v. Salkia Transport Associates [1983] 143 ITR 39/13 Taxman 191 (Cal.), CIT v. Nidish Transport Corpn. [1910] 185 ITR 669/[1989] 44 Taxman 351(Ker.), CIT v. Dilip Singh Bagga [1993] 201ITR 995/[1994] 77 Taxman 66(Bom.), CIT v. Navdurga Transport Co. [1999] 235 ITR 158 (All.) and CIT v. Basti Sugar Mills Co. Ltd. [2002] 257 ITR 88/123 Taxman 693 (Delhi), it has been clearly and consistently held that mere non-registration of a vehicles in the name of the company or firm under the Motor Vehicles Act cannot disentitle it in regard to its claim of depreciation, when the facts on record are undisputed that such company or firm has in fact made the investment in purchase of the vehicle and such vehicle is being used for its business.

The requirement of section 32 is that the vehicle must be owned by the taxpayer and not that the taxpayer must be a ‘registered owner’ of the same under the Motor Vehicles Act.

2 Like

Mihir (Wealth Manager) (5288 Points)
Replied 11 October 2011

The company, not being the owner of the vehicle, cannot claim depreciation. To claim depreciation, the vehicle should form part of the fixed assets.

 

The director, however, can claim expenses incurred on his vehicle for activities related to the company.

PARIMAL DILIPKUMAR GOLWALA (PROPRIETOR) (95 Points)
Replied 24 August 2012

SIR, MY QUESTION ARE AS FOLLOWS :

1. VEHICLE IN THE NAME OF THE DIRECTOR NUT THE MARGIN MONEY AS WELL AS EMI OF THE CAR WAS PAID BY THE COMPANY

IN THAT POSITION WHAT CAN DO COMPANY IF THE COMPANY PAID INTEREST ON EMI AS WELL AS DEPRECIATION POSITION ?


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