Treatment of capital subsidy as per revised schedule vi
This query is : Resolved
CA Sanjay Baheti
(Querist)
12 June 2014
Dear Experts,
One of my client being a Pvt Ltd Co has engaged in manufacturing activities. The company has already commenced commercial production in F.Y.2012-13. Now during year 2013-14 the company has received Rs.15.00 Lacs as Capital Subsidy from DIC. Now query is with regard its treatment as per Revised Scedule VI Balance Sheet as per Companies Act that is whether such subsidy has to be separately shown under grouping "Reserves And Surplus" as Capital Subsidy Account or the same may be reduced from Plant & Machinery block of Fixed Asset for the purposes of computing Depreciation as per Companies Act for the year under audit.
Please give reply with cited case law also as per I.T.Act for computing Depreciation as per I.T.Act.
One of my client being a Pvt Ltd Co has engaged in manufacturing activities. The company has already commenced commercial production in F.Y.2012-13. Now during year 2013-14 the company has received Rs.15.00 Lacs as Capital Subsidy from DIC. Now query is with regard its treatment as per Revised Scedule VI Balance Sheet as per Companies Act that is whether such subsidy has to be separately shown under grouping "Reserves And Surplus" as Capital Subsidy Account or the same may be reduced from Plant & Machinery block of Fixed Asset for the purposes of computing Depreciation as per Companies Act for the year under audit.
Please give reply with cited case law also as per I.T.Act for computing Depreciation as per I.T.Act.
CA UMESH DULAL
(Expert)
12 June 2014
reduce the sum of capital subsidy from cost of assets and charge depreciation on remaining balance.
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