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For having registered motor car in the name of director even while showing it as part of fixed assets the company had to suffer a disallowance of 25% of depreciation and car repair costs in (2023) 22ITR OL(419). This treatment of 25% personal or not wholly and exclusively for business is considered apt both by the Hon’ble Tribunal and Hon’ble the Gujarat High Court. It would be wise for the tax auditor to follow this rationale and check registration certificates (RC) before confirming the figure of depreciation admissible under section 32 in their tax audit report as well as 25% of car expenses for personal purpose. Appropriate change in 3CD may be made to incorporate a clause whether the depreciable assets are held in the name of the company.

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