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Loss on sale of car disallowed in itr ?

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aksng sh

4 Points Posted on 23 July 2023

In partnership firm business there is loss on sale of car which was its fixed asset. Is it allowed or disallowed in itr ?

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Quick Summary

This discussion clarifies whether a loss incurred from selling a car, which was a fixed asset of a partnership firm, is allowable or disallowed in the Income Tax Return (ITR). While Section 37 typically disallows capital losses, Section 41(2) may allow losses on depreciable assets. The consensus is that a car is not a capital asset in this context, and the loss is generally allowable.