one practical question :
one of a person A have buy a car by loan before 5 years. He is engaged in a tour and travel business and having no company i.e. working in a proprietorship.
A buy one another car on loan. he set out a contract with B that B will drive the car and will retain the earnings, for this loan will be repaid through the cheques received from B by A himself. but didn't transfer the ROC to B i.e. didn't transfer the car to B.
A buy another car on loan. He set out another contract with C same as above ( that C will drive the car and will retain the earnings, for this loan will be repaid through the cheques received from C by A himself.)
A is now eligible to maintain the accounts as per tax laws. ( profits 150000+ for three years)
My questions are:
1. accounts are really required to be maintained by A?
2. if accounts are to be maintained then on what amount the cars will be shown in the books? Does it required to be revalued?
3. If cars are to be taken into the books then depreciation will be on the rate of taxation.
4. does the cheques received will be the income of A? If yes then in what head?
5. If any I am not covering here...
Thanks in advance
CAclubindia
