Dear all, can u tell me whether profit arising from revaluation of land and building be used for settingoff carryforward loss from previous years
Sivaprasad.M (Chartered Accountant) (83 Points)
14 July 2011Dear all, can u tell me whether profit arising from revaluation of land and building be used for settingoff carryforward loss from previous years
Anshu Garg
(working)
(139 Points)
Replied 14 July 2011
ACC. TO ME
LOSSES CAN BE SET OFF FROM FREE RESERVES AND REVALUATION PROFIT WILL BE CREDITED INTO REVALUATION RESERVES WHICH IS NOT A FREE RESEVE
SO SET OFF CAN NOT BE DONE.
CA Karnik Pandya
(Chartered Accountant)
(36 Points)
Replied 14 July 2011
Dear Sivaprasad,
Here in this case profit on revaluation of land and building is not realised gain. Imean to say it is not realised in cash. For setting off past losses there must be realised gain / profit to br set off against.
Here in this case for revaluation portion "Revaluation Reserve A/c" will created and it will only be available for setting off depreciation allowance like Depreciation on revalued amount of land & bulding.
I think this limited explanation is capable to make you understand.
CA CS CMA Sanjay Kumar Sareen
(Professional Faculty)
(186 Points)
Replied 14 July 2011
No it is not allowed. Revaluation Reserve is not a free reserve which allow past losses to be adjusted against the same.
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