Dta/dtl

This query is : Resolved

Pintulal Choudhary (Querist)
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06 June 2012 Hi Experts,
Can we recognize Deferred Tax Liability/Asset in case if we have Loss as per Books of Account.

For Eg: In my case Loss as per Books is Rs.4450/- which includes Dep as per Co.Act Rs. 1374/-.
Where as Dep as per IT Act is Rs.6600/-.
Now there arises DTL.Can I recognize it.
Also can I Recognize DTA arising out of Unabsorbed Dep and Losses Under IT Act (loss under IT Act was Rs.9676).
If Yes how should I Treat them in the Books of Account.

CA SMR

CA SMR (Expert)
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06 June 2012 Where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets should be recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

CA SMR

CA SMR (Expert)
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06 June 2012 More opinion is solicitated

Pintulal Choudhary

Pintulal Choudhary (Querist)
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07 June 2012 Yes,there is virtual certainty that Co will generate sufficient taxable income in future.But how to treat them in the Books of Account.For Eg: in the given case DTL will be 1615 where as DTA will be 2990.
Now DTA & DTL can be set off as they governed under same taxation authority & also there is intention to do so.
Net DTA will be 1375.can I show this under Deferred Tax Asset(Net)under Non current Asset of Revised Schd VI of Co act.

CA SMR

CA SMR (Expert)
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07 June 2012 I have taken this from AS 22.
"Deferred tax assets and liabilities should be distinguished from assets and liabilities representing current tax for the period. Deferred tax assets and liabilities should be disclosed under a separate heading in the balance sheet of the enterprise, separately from current assets and current liabilities."

My interpretation is both DTA and DTL shd be shown under non-current assets and liabilities.

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