MAT Calculation

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This query is : Resolved

Hardik Varu (Querist)

15 September 2010 If an assessee has unabsorbed depreciation and business loss(as per books of accounts) as follows:

business loss
A.Y.07-08 50000
A.y.08-09 15000

Unabsorbed depreciation
A.Y.07-08 30000
A.y.08-09 70000

IN MAT lower of unabsorbed depreciation & business loss is eligible for set off.
This comparision is to be made yearwise b/w loss & depreciation or b/w total unabsorbed depreciaton & total business loss.

If year wise comparision is done then deduction wud be 30000 of dep of AY 07-08 & 15000 business loss of AY08-09.
Total Rs. 45000

And if total dep. & loss is compared then deduction wud b Rs. 65000 of business loss.

What is the correct way???

If possible, also give reference of any case law, notification or guidance note.

CA Harish Suwalka

CA Harish Suwalka (Expert)

25 January 2013 amount of brought forward loss or unabsorbed depreciation whichever is less” in clause (iii) shows the intention of the legislature for considering one consolidated figure of brought forward loss or unabsorbed depreciation for the earlier years in totality and not on year to Year basis, the logic is also approved in the case of amine textiles

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