Rajkumari Agarwal Vs ACIT (ITAT Jaipur)
Mercedes in the Balance Sheet, Personal in Use: ₹20.67 Lakh Capital Loss Denied
The Jaipur ITAT upheld the disallowance of ₹20,67,120 claimed as long-term capital loss on the sale of a Mercedes car, holding that the vehicle was a personal effect excluded from the definition of “capital asset” under Section 2(14).
The Tribunal rejected the contention that showing the car under fixed assets in the balance sheet, coupled with the absence of any depreciation claim, automatically made the loss allowable.
The decisive consideration was the purpose for which the car was held and used. The assessee had herself treated its expenses as personal and confirmed that position during assessment.
Car Sale Loss Was the Sole Assessment Adjustment
The assessee filed her return for AY 2023-24 on 31 July 2023, declaring total income of ₹4,49,75,500.
A search had been conducted on the Derewala & Associates Group on 2 February 2023, and jurisdiction over her case was subsequently assigned to the Assessing Officer.
The assessment was completed under Section 143(3) on 29 March 2025, determining total income at ₹4,70,42,620. The sole adjustment was the disallowance of the ₹20.67 lakh capital loss claimed on the Mercedes car.
