MAT on Company to be Striked off us 560 of Companies Act

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Gaurav Guglani (Querist)
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17 April 2010 Facts:

We have a Company XYZ Ltd. which is incorporated 4 years back and no business in undertaken in the said company till March 25, 2010. Directors of the Company decided to file an application to strike off the name of the Company u/s 560 of Companies Act.

As on March 31, 2009 status of Company B/S was as under:

Liabilities:

Share Capital 1,00,000/-
Unsecured Loan from Directors - Rs. 1,00,000/-

Assets:

Cash & Bank Balances - Rs. 10,000/-
Profit & Loss A/c (Dr. Balance) - Rs. 1,90,000/-

Now as the Company decided to get striked off from Register of Members with ROC wef March 25, 2010 following activities took place:

1.Company incurred Rs. 20,000/- expenses during the financial period ending March 25, 2010.
2.Additional Rs. 10,000/- Loan was taken from Director to meet those expenses.
3. Directors gave their consent to waive off the entire Loan amount of Rs. 1,10,000/-

My Concerns are as under:

1. How to show Unsecured Loan written off in Financial Statements.
2. If the same need to be shown in Cr. side of P&L Account the Company will have a profit for the year amounting to Rs. 90,000/-, in that case though the lossess & share capital are equal as on March 25, 2010, also there will be no other asset / liability as on that date will the company be required to pay MAT on book profit??

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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17 April 2010 1. Unsecured loan will be shown in the balance sheet. No further adjustment is required. Waiver letter substantiates this.
2. No profit and loss account is to be prepared. Hence no w/back adjustment is required. Consequently question of MAT also does not arise.

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