Computing Book Profit U/s 115JB

Dear Experts,

We have done Sales Tax Assessement for the year 2005-06, the authorities assessed and issued a demand notice to pay extra tax. We have paid part amout and gone for appeal. In our books we have made a provision for the entire demand, and consequently debited the part amount paid by us for the appeal. Case 1 :-  What will be the treatement for the provision and the amount paid while computing book profits. Case 2 :- if disallowed whether can be claimed in the year in which the appeal is settleled.

Praveeri.

Replies (4)

Dear Praveeri,

The provsion of sales tax will not be added back in computing Book Profit u/s 115 JB as it is created accoriding accounting practices followed and there is no prov in 115 JB which requires to add back the same.

Thanks & Regards

Hitesh

 

provision for unacertained liability is added back but provision for ascertained liability is not added back.

Provision for Sales Tax is an ascertained liability though the amount cannot be quantified. Hence, the same shall not be added back while computing Book Profits

Hi,

It shall not be added back

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