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10 December 2010

HI,
My question is that our firm sold the Fixed asset(Car) in FY 2009-10 & booked the profit in the books in the computation of that FY.The Asset is sold to on of our relatives with mutual understanding that our firm will pay the monthly installments on that asset.The asset is financed from the bank.We receive the full and final payment of the asset.
Kindly suggest me whether we can claim the Interest expenditure in our books even though we sale the asset.

Thanks & regards
Vishal

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6 Replies

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 10 December 2010

Hi Dear,

Yes u can get deduction of Interest on loan paid after sale of motor car. porvided following conditions needs to be fulfilled

1. The sale proceeds of Motor car received from relatives must be invested in firm's business and should be utilised for business purpose.

2. if the proceeds has been utilised for personal benefit of partners (in case of partnership firm) or proprietor (in case of proprietory concern), the deduction would be disallowed under sec 37 of Income tax act.

For claiming deductions under income tax act, the fact is important that the expenditure must be utilised for business purpose. After selling car, it is just presumed that the loan has been provided as an unsecured (if no assets security replace with Car that being sold) and the proceeds of the sale must be reinvested in business.

Regards,

Manoj

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(Guest)

nice reply by manoj ..i agree

(Guest)

Originally posted by : Manoj B. Gavali
	Hi Dear, Yes u can get deduction of Interest on loan paid after sale of motor car. porvided following conditions needs to be fulfilled 1. The sale proceeds of Motor car received from relatives must be invested in firm's business and should be utilised for business purpose. 2. if the proceeds has been utilised for personal benefit of partners (in case of partnership firm) or proprietor (in case of proprietory concern), the deduction would be disallowed under sec 37 of Income tax act. For claiming deductions under income tax act, the fact is important that the expenditure must be utilised for business purpose. After selling car, it is just presumed that the loan has been provided as an unsecured (if no assets security replace with Car that being sold) and the proceeds of the sale must be reinvested in business. Regards, Manoj

CA Deepesh Ruhela (Keen to Learn) (3271 Points)
Replied 10 December 2010

agree with Manoj...

CA Vishal kapoor (Partner) (320 Points)
Replied 10 December 2010

Thanks 4 d replies

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JAI PRAKASH TRIPATHI (Employee) (22 Points)
Replied 12 December 2010

Dear Friend,

Need Your Help !!!!!

5 years ago i was warking in a hotel. I resigned after 2 years, and after one year i applied for withdrawal of my PF but the the form was returned with a remark that SS Signature not tally. again few month later i got my form sighned by the authorised signatory of that hotel and submitted again but, the same problem, it return back. now the hotel has been sealed. and no one there in accounts to short my problem.

later some one suggested me to get a signed with gazeted officer ( Govt Employee), i follow their instruction and submit the form again, but problem still remain the same.

Now I want to know is there option to get my money back from PF department.

Please help me to shortout my problem!!!!!!!!!!!!

Thanks & Regards

J.P Tripathi

e-mail id - jp.tripathi @ hotmail.com