Profit on sale of car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2016 I own 2 cars. Both were purchased in 2004-05 registered in my name.
- Till 2011-12, I was using them for my business where i was sole proprietor, and accordingly claiming depreciation @15%
- Post 31.3.12, there was no business activity in the firm.
- The wdv of the cars on 31.3.12 was Rs 1.8 lakhs and Rs 1 lakhs. Total block value was 2.8 lakhs
- I sold the 1st car in Jan 2016 for Rs 2 lakhs. I am still using the 2nd car

How would i treat this transaction
- is the profit of 20k chargeable as capital gains, or income from other sources
- is my cost acquisition for this car 1.8 lakhs or 5 lakhs for which i initially purchased the car?

Amol S Joglekar

Amol S Joglekar (Expert)
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24 January 2016 although there is no business activity, is the business closed or still exist?
if it exists, then you need not pay capital gain as your block still remains at 80,000

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Querist : Anonymous

Querist : Anonymous (Querist)

24 January 2016 Thank you. The business is shut down now. What should the treatment be?

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CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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25 January 2016 How did you close your business is important. Balance sheet on the date of closure of business and how you transfer those assets and pay liabilities, the way you converted them into your personal assets to be checked.

Normally depreciable assets used in the business on their transfer attracts short term capital gain, if block of asset relating to that asset exhausts completely