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MAT U/s 115jb

CA PARTH SHAH (In Practice) (1951 Points)

01 July 2011

HELLO FRIENDS,

WHILE CALCULATING BOOK PROFIT U/S 115JB IF BY MISTAKE, ADJUSTMENT OF BROUGHT B/F LOSS OR UNABSORBED DEPRECIATION AS PER BOOKS OF ACCOUNT WAS NOT DONE FOR PY 2009-10. INCOME TAX DEPARTMENT HAVE NOT RAISED ANY QUERY UNDER INTIMATION U/S 143 AND COMPANY ALSO GOT REFUND. NOW IN CURRENT YEAR TOO, COMPANY HAS EARNED PROFIT AND HENCE IT ALSO HAVE BOOK PROFIT. B/F LOSS WAS 50,00,000 AND BOOK PROFIT WAS 10,00,000. CURRENT YEAR BOOK PROFIT IS70,00,000 .

NOW THE QUESTION IS WHILE DOING ADJUSTMENT OF DEDUCTING B/F LOSS OR UNABSORBED DEPRECIATION FOR THE CURRENT YEAR, WHETHER WE HAVE TO DEDUCT FULL B/F LOSS50,00,000 FROM BOOK PROFIT70,00,000 OR ONLY40,00,000 (NOTIONALLY ADJUSTING10,00,000 OF P.Y. 2009-10) FROM BOOK PROFIT70,00,000 IN P.Y. 2010-2011?

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4 Replies

Prabhavathy, M.Com, ACA (Chartered Accountant) (35 Points)
Replied 01 July 2011

Last year the company paid tax on book profit or Income tax profit.

(Guest)

Very interesting,

now the question arises whether it is mandatory to claim business loss or unabsorbed depreciation as per books of accounts.

Now as per my opinion the provisions of S 115JB are mandatory. If it was not claimed then AO has the power to adjust it. (Apollo tyre case)

If you wish apply for rectification of mistake u/s 154.

Thanks

1 Like

CA Saiyum khan (Practicing CA) (685 Points)
Replied 01 July 2011

It is suggested to apply for rectification u/s 154 and get the refund of the tax paid on Rs.10,00,000 book profit. In the current year only Rs.40 lacs would be available for adjustment.