Sundeep Kandoi (Director) (76 Points)
03 July 2009Hi,
As per income tax does the depreciation on car applicable from date of invoice or the date of registration with RTO?
Example::
Date of invoice from car dealer is 31/3/2009
Date of Registration with RTO as per registration certificate is 10/4/2009
So will the half year depreciation on the car shall be available in the Fin year 2008-09?
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 03 July 2009
Sundeep Kandoi
(Director)
(76 Points)
Replied 03 July 2009
Dealers have temporary regn number for car once the car is available after booking.They sometimes need to drive the car from their godown to showroom. And once the Invoice is made in the customers name then the customer can drive the car using that temporary regn number. The car can be registered within next few days. So as a thumb rule i feel(not sure) depreciation shall be available.
praveen
(Chartered Accountant)
(6971 Points)
Replied 03 July 2009
i am not that sure
but i think it is from the date of physical possession.
Arun
(C.A. Student)
(38 Points)
Replied 03 July 2009
hi dear. it is the date of invoice which has to be seen for the purpose of depreciation. Registration of vehicle is not determinative of ownership.Benficial ownership is consider for claiming depreciation.Also for detail knowledge u may refer the case of MAYSURE MINERALS LTD. (SC) AND NIDESH TRANSPORT COMPANY (SC).
Jiten M. Trivedi
(Article Assistant)
(56 Points)
Replied 03 July 2009
Well as per me its tha date of Putting the Vehicle to use. Bt as the date of purchase isdeemed to be the date of putting it to use unless otherwise proved. ITS THE DATE OF INVOICE TO BE CONSIDERED....
CA Manish K Dhoot
(CA, B. Com, NCFM, CPCM)
(5015 Points)
Replied 03 July 2009
when possession is transferred to buyer then from that date buyer can claim dep.
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 03 July 2009
Mr. Jiten says that the date of put to use is relevant for claiming depreciation. As per general thinking no car can move unless it is registered with the RTO. Hence if it requires to be registered before being put t use then depreciation will be allowable from the current year.
Satish
(CA Final Student)
(479 Points)
Replied 03 July 2009
Once the car is purchased, registration is the formality. The ownership is dependent upon the invoice & not the registration. Also in Income tax Act, the word "Put to use" mean ready for use. It does not necessarily require that the asset should be used immediately. Ready for its intended use is enough. Car is always sold in a ready condition. Hence the date of invoice is a deciding factor to avail the depreciation.
CA. Varun Soni
(Chartered Accountant)
(201 Points)
Replied 04 July 2009
The date of purchase is relevent and not the date it got rgistered in the name of the owner. Registration is just a formality.
Max Payne
(employed)
(2574 Points)
Replied 04 July 2009
Dear Sandeep, the criteria for claiming depreciation is ownership. But courts have held that the right to exclude any other person from using the asset is sufficient for claiming depreciation.
Now again, it is sufficient that the asset is ready to put to use... but the asset is ready to put to use only when it is registered... cos under the Motor Vehicles act, u cant drive (use) vehicles unless they are registered... my conclusion is that the right to exclude others becomes yours only when it is registered, not when invoice is raised (why cant u return the car before it is registered??), and the asset is ready for passive use only once it is registered with the RTO....
So u can claim the depreciation only in the year of registration.
Siddharth S
(CA Practice )
(21 Points)
Replied 04 July 2009
As per Income Tax depreciation on asset(car) will be available from the date of ownership or possesion of asset(car).
For this purpose ownership or possesion is from the date of invoice & not from the date of registration with RTO.
Car is capable of "put to use" from the date of invoice and not from the date of registration.
CAclubindia
