Sanjay (Director) (155 Points)
21 September 2012Hi,
Mr. A purchased a car worth 6 Lacs.
Mr. A gives the car on Rent to his Partnership firm at prevailing market rates and depreciates the car in his own books of A/c
After 3 years, Mr A sells the car for 2.00 Lacs
Can Mr. A enter loss (Depreciated value less Sale price) in his PnL ?
Seeking opinions pls.
Thx
Sanjay
Swami Ayyappa Nuli
(TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER)
(1372 Points)
Replied 21 September 2012
no because u already claim the depreciation u/s 32 in mr r books.
eg original cost=600000
w.d.v =200000
depreciated value=400000
sale comsideration=100000
the loss of 300000(400000-100000)shall not be allowed
long term capital loss=100000(200000-100000)
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 27 September 2012
On sale of depreciated assets the loss/profit arising therefrom is always considered as Short Term Capital Gain/Loss. This Gain/Loss arises only if the block ceases to exixt after sale of the asset(s). So after sale of your car if the block ceases to exist then it would be considered as a Short Term Capital Loss and it will get reduced from the total taxable income by claiming set-off.
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