08 May 2013
My client is individual having business income. He had one car of rs. 2,66,000/-, in fixed assets. during this year he sold that car for Rs.2,00,000/- and purchased a new car for Rs. 12,00,000/-. Remaining balance of old Car Rs.66,000/- can be treat as loss on sale of old car or can be treat the balance of block Rs.12,66,000/-. If we recognize loss on sale of old car under which section it shows?
08 May 2013
Capital gain or capital loss arises only in case the entire assets from the block have been sold. ie if block represent nil value at year end.
While in your case the asset is present at the closing of the year. Hence Rs 66000 will be adjusted in the value of block and thus the new block value will be Rs 1266000/-.
CAclubindia
