Depreciation

Hi all,

if the company has sold the car and purchased the car in the same financial year and the car is sold on loss and it is also insured. Can depreciation be claimed on both the carsi.e. the car sold and the car purchased. How the situation is dealt in the books of accounts and in the income tax.

Replies (5)
As per IT Act Block's WDV will be deducted by the value realised of car sold and value of car pruchased be added and on final amount of wdv calculate depn at year end 2. while as per account :: calculate loss on sold car and pass entry of sale and loss and depn and for new car pass entry of purchase and depn
..
yes Priyanka is absolutely correct.
HI, Its depend upon the nature of transaction. Hope you remember AS-1. AS-1,Says something about substance over form(SOF).According to SOF,The auditor considers whether the financial statements reflect the financial reality of the entity rather than the legal form of the transactions and events which underlie them. In your case,If its mere book entry.You cant book the loss,which you come to know by auditing.Wheather its mere book entry or real transaction. If its not mere book entry than Priyanka"s is absolutely correct. If its mere book entry than depreciation is as usual and this transaction will not be treated as a purchase & sells transaction
Dear pals, If Loader can be treated as PLANT & MACHINERY?

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