Co-borrowers on a vehicle loan for business!

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Tax

Student

135 Points Posted on 18 March 2017

Facts of the Case :

Two Assessees -

Father & Son

They purchase two vehicles on loan

Vehicles are being used for Business

Vehicles are in the name of Son..

But loans taken for both the vehicles have both father and son as co-borrowers..

Instalments for both the loans are deducted from Father's Bank Account..

Queries -

1. Vehicles should be shown as assets ONLY in Son's books of account as they are in his name?

2. Vehicle Loans should be EQUALLY DIVIDED BETWEEN FATHER'S and SON'S P&L A/c and Balance Sheets? -

a) Int on Vehicle Loans should be divided equally in Father's and Son's P&L A/cs?

b) Outstanding Vehicle Loans should be shown divided equally in both Father's and Son's Balance Sheets?

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 19 March 2017

" Vehicles are being used for Business"

All the answers are based on constitution of the business or businesses!!!

Tax

Student

135 Points Posted on 19 March 2017

Originally posted by : Dhirajlal Rambhia
	" Vehicles are being used for Business" All the answers are based on constitution of the business or businesses!!!

Originally Business was in the name of a firm with Father as a Proprietor..

Son joined the business laters..

But the firm is still a proprietorship in the name of father..

Son does the same business with father under his own name without any partnership on paper with father's firm..

Both the vehicles were bought after 2 years after the son joined the business

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 19 March 2017

"Vehicles are in the name of Son.. But loans taken for both the vehicles have both father and son as co-borrowers.."

1. Isn't is crooked up, when both are running proprietorship businesses independently?

2. No clear cut solution to the mess, unless the whole business is declared in HUF file u/s. 44AE. (Provided the vehicles are trucks or any goods carriage)