Income under head pgbp

Tax queries 1929 views 2 replies

Guest

Hi friend,I have tried many question but have some doubt in following point. plz see and comment.

What is treatment of these following items in calculation of income under head income from profit and gains of business and profession

(i)If it is given P&L eg in DR side of P&L that sales tax paid in the year is Rs 38,000.And in additional information it is given that sales tax of 38,000 include interest for late payment of Rs1200 and penalty for for evading the sales tax is Rs10,000. so what is treatment of it in calculation of computing income under head profit and gain of business and profession.

(ii)If it is given in additional information to p&L a/c that assesse has purchased a plant of Rs 30,000 for the purpose of carrying on scientific research relating to his business. Neither cost nor depreciation is debited to P&L a/c. what is the treatment of it in computing income under head PGBP.

(iii)IF in P&L a/c it given on Debit side that preliminary exp Rs 6000 and also expenditure incurred in family panning is Rs 6000(out of which Rs 4000 is capital expenditure)

Replies (2)

CA Hardik Bunha

self

2121 Points Joined June 2011

(1) Rs. 10,000/- will be disallowed

(2) It is Right No effect on p/l a/c. Direct effect will be given computation.

(3) diallowed rs. 6000 and deductible 1/5 of total prelimanary exp.

Ravi Kumar Mahaur

CA-FINAL

202 Points Joined August 2010

1) Any sum chargeable due to prohibition of any law for the time being in force shall not be allowed to the assessee while calculating his total income chargeable to tax (in such case it is penalty of Rs10000).

2) As per section 35(1)(iv) an assessee is eligible to get 100% deduction in respect to all kinds of capital expenditure (excep land) in the year of commencement of business. However, the assessee is not eligible to claim depreciation on such capital expenditue once he claimed 100% deduction with respect to such expenditure. So here is a choice of the assesee to claim 100% deduction in the year of commencement of his business or claim depreciation on such expenditure.

3) As per Section 35 D only 1/5th (6000/5) of preliminary exp. shall be allowed to the assessee in the year in which the expenditure incurred and the remaining(6000*4/5th) in next 4 years. Same way you deferr the amount of expenditure on family planning the only difference is this that such expenditure should be incurred by the COMPANY for its "Employees".