In calculating Book Profit i have a doubt. Will any one clear it please?.
Profit during 2009-10 after depreciation Rs.2,00,000/- The company have accumulated loss up to 2008-09 Rs.10,00,000/- which contains unabsorbed Depreciation 7,00,000/- Business loss 3,00,000/- . If i adjusted the profit against unabsorbed depreciation then the unabsorbed depreciation become Rs.5,00,000/- Then lower of Unabsorbed depreciation or Business loss i.e.Rs.3,00,000 wil be deducted resulting in negative book profit. on the contrary if i adjuste the profit of Rs.2,00,000 against business loss then business loss become Rs.1,00,000/-. The lower of two i.e. Rs.1,00,000/- will be deducted resulting in positive book profit of Rs.1,00,000/-. which one is correct?. Can i take first one which is favourable to me. Will department accept it ?
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