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Loss due to depreciation

Sahana (student ) (55 Points)

13 October 2017

Hello everyone
An entity is in loss due to heavy depreciation . Specially due to heavy investment in building of factory and as it is the initial stage of the new venture of the business there are no sufficient returns .The entity cannot show loss too.Kindly give your views

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7 Replies

(Guest)

give details of depericaition

also compair it with law 32 and 35 of income tax

for starting stage of business loss definate

Akarsh Prince (47 Points)
Replied 13 October 2017

why the entity cannot show loss

Sahana (student ) (55 Points)
Replied 13 October 2017

As it has to give details to bank it cannot show loss

saurav joshi (article) (45 Points)
Replied 13 October 2017

As balance sheet for shareholder prepared on the basis of Schedules to Companies Act 2013 you can take extended life of an asset (reasonably), which results to lower amount of depreciation as per Companies Act 2013.
Although as per Income tax Act it is mandatory to charge depreciation on assets at a fixed rate on WDV method leaves no room for this.
Note: - The effect on Deferred Tax recognition shall also be taken into consideration.

Akarsh Prince (47 Points)
Replied 13 October 2017

Legally u cannot do anything to convert such loss into profit... what can be done is file ITR as per the provisions... Prepare operating cash flow statement and get it certified by a CA... Submit that statement along with ITR...