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Loss on impairment of fixed assets

SHWETA ASHOK DAVE (Chartered Accounatnt) (39 Points)

01 September 2014

Hi friends,

whether loss on impairment of fixed assets is allowed as per normal provision and Sec. 115JB of the Act.

kindly state any relevant case law, if any.

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 01 September 2014

Under Normal provisions of IT Act loss on impairment is not allowed because it is only a unrealised loss thus not covered by Sec 28 to Sec 44D...

But while calculating book profits for MAT purpose, such loss cannot be added back because book profits means Profit as per P&L prepated in accordance with the AS issued by the ICAI.....

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Ramakrishna Kamat (CA) (76 Points)
Replied 04 September 2014

Pls check Clause (i) of explanation 1 to Sec 115 JB (1) as per which the amount or amounts set aside as provisions for diminution in the value of any asset needs to be added back to Book Profit.

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