Ram CA (Student) (50 Points)
10 December 2011In case of a proprietory concern, the proprietor receives a loan from his relative for purchasing a car for official use. He repays the loan with an interest @ 5% p.a. on a monthly basis. If the proprietory concern does not come under the tax audit category, will the interest be allowed as an expense as per Income Tax Act? Please Clarify.
CA. MANOJKUMAR SONI
(CA)
(145 Points)
Replied 10 December 2011
Ofcourse there is nothing prohibiting allowance to such legitimate business expenses for Auditable and Non-Auditable assessees.
C.A. Jignesh N. Mehta
(C.A.)
(1030 Points)
Replied 10 December 2011
Yes the expenses will be allowable if the car is used for official purposes only.
There should be no scope for personal use.
Naresh Patel
(C.A. Final)
(144 Points)
Replied 10 December 2011
amartay dev mahanti
(n/a)
(38 Points)
Replied 12 December 2011
there is nothing wrong in the treatment of unsecured loan
CA Shraddha (Mcom, CS Exe.)
(Service)
(224 Points)
Replied 12 December 2011
Yes the expenditure is allowable.
michaelK
(NA)
(46 Points)
Replied 12 December 2011
expernditure is allowable i guess ....because the car is used for official purpose Senior Citizen Deposits
Nitil Kr. Agarwala
(Persuing CS)
(264 Points)
Replied 12 December 2011
Yes the espenditure is allowable but also i am totally agreed wid Naresh Patel. So the same should be kept in mind.
CA Maulik Rachh
(-)
(114 Points)
Replied 13 December 2011
Agree with Naresh,he gave the most practical answer..
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