Mr.A has got a Car worth Rs.10Lacs on his marriage.He bringing that Car to his proprietory own business.Whether he is eligible to claim depreciation ? If so what is opening WDV ?
8 Replies
sumit jain
(.)
(844 Points)
Replied 22 September 2011
yes he is eligible to claim depreciation and the opening wdv should be 10lacs
(correct me if i m incorrect)
CA.Karthikeyan G
(M.Com)
(201 Points)
Replied 22 September 2011
Plz justify if u have some case law in hand.Becoz am getting number of different answers from freinds and CA's for this doubt.
CA.Karthikeyan G
(M.Com)
(201 Points)
Replied 22 September 2011
Mr.A has got a Car worth Rs. 10Lacs as a gift on his marriage.He bringing that Car to his proprietory own business.Whether he is eligible to claim depreciation ? If so what is opening WDV ?
Vikas
(CA)
(1135 Points)
Replied 23 September 2011
In my view, the value should be Rs.10,00,000/-.
In his personal balance sheet, he might show this as
Motor Car Account Dr.
To Capital Account.
Accordingly the entry in his business books can be passed.
I derived this conclusion from the point as the figure in case of cash gift is also shown as a part of ur balance sheet i.e., cash / bank addition, then similarly why cann't it be addition of a fixed asset.
But, he should maintain the receipt of the car purchased and the gift deed for further assessment procedures...
CA Vishal kapoor
(Partner)
(320 Points)
Replied 23 September 2011
HI,
According to Explanation 2 to sec 43 (1) , Where an assest is acquired by the assessse by way of gift or inheritance, the actual cost to the assessee shal be the actual cost to the previous owner as reduced the depreciation actually allowed on the asset and the amount of depreciation that would have been allowable to the assesse .
In your case you got a Car as a gift, so the actual cost for you is RS 10Lac which the cost of the previous owner.
CA. Roopali Kadam
(Jobs on assignment basis.)
(1459 Points)
Replied 23 September 2011
| Originally posted by : CA Vishal kapoor | ||
 |
HI, According to Explanation 2 to sec 43 (1) , Where an assest is acquired by the assessse by way of gift or inheritance, the actual cost to the assessee shal be the actual cost to the previous owner as reduced the depreciation actually allowed on the asset and the amount of depreciation that would have been allowable to the assesse . In your case you got a Car as a gift, so the actual cost for you is10Lac which the cost of the previous owner. |
 |
Agreed
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