Car purchase show in firm or partner individual account

Income Tax Income from Business or Profession
1

A partnership firm purchase of new car .but car invoice value one of the partner name show car used for partnership firm business purpose.
My doubt car value show in partnership firm or partner individual account entered books correct method in it act

2

@Divya_Singhvi @Laxmi_Navlani @Kaushal_Soni @AkashJhaveri can you?

3

hi @Sundaraiah_Kollipara

Section 32 of the Income-Tax Act, 1961 entitles a taxpayer to claim depreciation at prescribed rates for assets owned and used by the taxpayer for purposes of his business or profession.

However, (NVR Cinema v. ITO) it was held that if the car is purchased from the firm’s resource or the purchase consideration is credited to the partner’s current account or the capital account, it shall be construed that the firm is the owner of the car. Accordingly, the firm would be entitled to claim depreciation on such assets.

Hope this helps :slightly_smiling_face:

4

Does One Person Company can buy car for director?

5

@Bharti_Vasvani If you can help here.

6

Hello @Private,

Yes OPC can buy a car for the director and if the car is used for business purposes then it shall be construed as an asset of the company and depreciation with respect to such asset can also be claimed.