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Loss on impairment of fixed assets

Tax queries 10135 views 2 replies

Hi friends,

whether loss on impairment of fixed assets is allowed as per normal provision and Sec. 115JB of the Act.

kindly state any relevant case law, if any.

Replies (2)

Under Normal provisions of IT Act loss on impairment is not allowed because it is only a unrealised loss thus not covered by Sec 28 to Sec 44D...

But while calculating book profits for MAT purpose, such loss cannot be added back because book profits means Profit as per P&L prepated in accordance with the AS issued by the ICAI.....

 

Pls check Clause (i) of explanation 1 to Sec 115 JB (1) as per which the amount or amounts set aside as provisions for diminution in the value of any asset needs to be added back to Book Profit.


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