Stolen CAR

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 July 2010 An assesee having propritory business had purchased a car worth Rs. 7 Lacs. which was used in his business purpose as well as for personal. He had also taken the finance on this car from TATA Financials for Rs. 5 Lacs. This car had been stolen in the second year of its purchase. He is showing this car in his Balance sheet.
What would be the treatment of it as per Income tax ? Though the car is covered by insurance but amount of claim is not final?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 July 2010 The car must have been covered by insurance.

So amount received by the assessee will be considered as the sale consideration and balance loss will be allowable.