profit and loss a/c adjustments while calculating MAT

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A J Sankar (Querist)

21 October 2008 When we are calculating the MAT does it require to make adjustment to arrive book profit in addition to said adjustments(ie positive and negative)in the Income Tax Act???

If the books reflects wrong treatment of expenses (in accordance with the Act,1956 and ASs), do we need to make such adjustment to get correct profit(as per above provisions).

If it is given in examination (of FINAL CA PAPER) a problem which contains some wrong treatment, can I made such adjustments or am I need to continue (assuming the profit is inaccordance with the above provision( -act & as)with adjustments given in the Income tax Act itself?????

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

21 October 2008 PLease state the nature of the wrong treatment.

A J Sankar

A J Sankar (Querist)

22 October 2008 I have seen in singaniya's students guide in problem where the addition to leasehold property treated as expense(ie shown as debit to p&l a/c) and there is no adjustment regarding to it while calculating the book profit.

I think that additions to leasehold property should be capitalised and amortised over a period of lease. Am I correct

Sanjay

Sanjay (Expert)

22 October 2008 Once the accounts are audited and certified by the Auditor, then we need to go by the books only and AO has no authority to question the same and he has to accept it as correct. There are Supreme Court Decisions stating that the AO cannot go beyond what is stated in the books. I hope your query is with reference to whether you will have a problem in your IT assessment because of incorrect accounting in the books

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