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Profit on sale of fa as per books, no profit as per it act.

CA JAYANT MANI JAIN (PARTNER) (27 Points)

28 August 2017

We have sold a car in company and earned a profit on sale of car. we have calculated dep. and profit on sale of car as per companies Act,.

since as per I.T. Act, the block of asset exists, we have calculated dep. on the amount remaining after deducting the sale consideration from the opening WDV.

So, my query is how to adjust profit on sale of car in ITR-6 ( Plz. give coloumn and schedule no also of ITR- 6), so that no tax is payable on profit on sale of car and no query is received from CPC, Bangluru.

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5 Replies

Shivam Mansatta (2 Points)
Replied 28 August 2017

According to me sir one view can be first disclose that profit in P/L in income tax (Disclosing profit as per book) and same should be Less from profit while preparing profit as per IT

CA JAYANT MANI JAIN (PARTNER) (27 Points)
Replied 29 August 2017

Dear Shivam,

this is not my query,

Dear, My query is wherefrom to deduct the profit on sale of car in ITR-6 as it is not taxable because the block of assets exist, so that no query/ deficiency notice is received from CPC, Bangluru.

Anyone else may kindly advise.

regds

Luvish Jain (Tax Consultant) (507 Points)
Replied 29 August 2017

sir u need not to show it under itr-6 as income as ur block exists, rather show under depreciation calculation as 'assets sold during the year' from the block thats it and provide depreciation on remaining value only.

For any query u can pm directly to me.

1 Like

CA JAYANT MANI JAIN (PARTNER) (27 Points)
Replied 30 August 2017

Dear Mr. Luvish,

Probably you have not gone through my query properly

Dear, My query is wherefrom to deduct the profit on sale of car in ITR-6 as it is not taxable because the block of assets exist, while the same is shown in P&L A/c as 'Profit on sale of car' as per the accounting principles.

If we dont adjust(deduct) in ITR - 6, company has to pay tax on it, which actually is not liable as per income tax act and as per income tax rules in ITR - 6 form their is no specific column or tab which provides such type of adjustment (deduction).

Any other expert may please throw some light.

Thanks & Regards.