115JB

Others 1585 views 3 replies

HI ALL,

WHILE COMPUTING BOOK PROFIT FOR MAT WE DO START  WITH P.A.T & THEN PROCEED FOR ADDITIONS DELETIONS....

HOWEVER IF P.B.T. IS CONSIDERED TO BE THE BASE OF MAT COMPUTATION AM I SUPPOSE TO DEDUCT F.B.T  N ADJUST DTA/DTL AS THE CASE MAY BE....WHICH I OTHERWISE WUDN'T HAVE DONE (CONSIDERING PAT AS THE BASE.)

 

Replies (3)
Hi Rahul, Kindly read section 40a(ic), where u can find, FBT is a disallowable expenditure for all assessee. Hence if FBT has been claimed as an expenditure in P&L A/c., then the same has to added to PAT. But in case of PBT u need not add to it, b'coz FBT will be disclosed in P&L A/c. after PBT. (PBT = PAT + Income Tax + FBT + STT). FBT will be the permanent difference and not timing difference. Hence i guess DTA/DTL can't be created or reversed on FBT amount.
Hi Rahul this is CA Vishal Paliwal Your question is very good. If u r calculating MAT by Taking PAT i.e after giving effect of FBT & DTA/DTL as the case may be you r not required to give effect of FBT or DTA/DTL Charged to P&L and u should only condsider Current Tax b'coz FBT is not tax on income and the same principle also applied on DTA/DTL Provision & section 115 JB requires to give effect only on those items mentioned in that section. Kindly also see judgment given by JAipur ITAT

Whether we should add FBT ,when we are taking PAT while caluclating MAT


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