12 September 2011
Expenditure will be allowable under section 37(1) of the Income Tax Act, 1961 is as below: 1.Incurred wholly and exclusively for the purpose of the business or profession & 2.It is incurred during the accounting year& 3.It is not capital nature and not personal expenses of the assessee. Hence prior period expenses debited to profit and loss account should not be considered. For calculating book profits we have to take net profit as per profit & loss a/c
few additions or deletions will be made to Net profit to arrive book profits under MAT (Section 115 jb) To conclude: While taking net profits prior period expenses not to be considered for computing MAT
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