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Dep on car purchased & sold in same fy

Others 868 views 5 replies

Niranjan Goyal

S AVP

24 Points Joined May 2011

A company has continious block of asset (Car). It has purchased a car of 8 lac on 8th May 2011 and sold the same on 8th Dec 2011 at 7.5 Lac. Will company get Dep benefit as per block concept of IT Act.

The car cease to exist from block on 31st Mar 2010 & block got enhanced by 50K only.

Thanks,

Niranjan

9740327200

Replies (5)

CA Navin Jain

MANAGER (FINANCE & ACCOUNTS)

11768 Points Joined June 2008

in your case short term capital loss of rs. 50k will be come.

CA SANDESH MAHIPAL

Practicing in GST and MSME

1985 Points Joined September 2010

COMPANY CAN NOT GET BENIFIT OF DEPRECIATION.

CA Navin Jain

MANAGER (FINANCE & ACCOUNTS)

11768 Points Joined June 2008

Yes, as per companies act depreciation shall be calculated for the period.

CA Sumit Bansal

75 Points Joined February 2009

if there are other cars in the block then the company will get the benefit of depreciation and if the block ceases to exist on sale of that car the benefit of depreciation shall not be addmissible to the company

Shah Tarun

Student

800 Points Joined May 2008

As you mentioned there is no other car in the block and the same is showing balance of 50k.It will be considered as short term capital loss and there will be no depreciation for IT purpose.However in books of account treatment will be as per company act provisions and there will be depreciation.