Hi Dipak,
Here in your case, As Mr. Raju suggested, Car used for personal use will not be treated as capital asset. Hence the sale proceeds of your call are not subject to capital gains. This is based on the assuption that though you have stated that, you have shown the car in the books, it is only to explain your situation. Next if you really shown you car in you books, i dont know the reason why you have not claimed the depreciation as you are a business man preparing books of accounts and showing car on the assets side at Cost. It is very interesting argument that the vijay has made, very impressive questions. But i am not happy with the explanation given by Mr. Raju Chandak. Mr. Raju Could you just tell me how it iwll avoid queries by Income tax department when Mr. Dipak has purchased from his personal account, it has the same effect whether he has disclosed or not in the books. and why there won't be any queries by Income Tax Department for not claiming depreciation. As Mr. Vijay has pointed out, claiming depreciation is a must for tax accounts. Does it mean Mr. Deepak is showing more income. Dear Deepak There will be alternative opinions and suggestions unless you place the question without amibiguity stating the following 1. What do u mean books, is it your personal records or books of accounts of your business. 2. year of purchase of car. 3. intended and actual purpose of car (personal/business). 4. date (year) of capitalisation in the books and at what amount. 5. year of sale and sale proceeds. Thank you.
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