While computing deduction u/s 80JJA which profit is to be considered for amount of deduction - Profit as per Profit & Loss A/c or Adjusted profit after allow/disallow expenses as per IT Act?
Example-
Profit as per P/L = Rs. 10 lakhs
Dep as per Companies Act =Rs. 1 lakh
Dep as per IT Act = Rs. 1.20 lakhs
Disallowed exp u/s 43B (Cont. to PF) = Rs. 5 Lakhs
Disallowed exp (Int on tds/service tax) = Rs. 0.15 lakhs
Deduction u/s 80JJA will be Rs. 10 Lakhs or Rs. 14.95 laks?
Normally in all deductions under chap VIA based on income of Business( as Opposed to Income of Assessee), the profit as per the P & L account has to be considered for deduction. This is so becos the deduction is for the commercial profits of the eligible business only. However, in you computation you should consider all disallowaces etc.
But if we consider for deduction, profit after adding back disallowed expenses, then the very purpose of disallowance will be defeated becoz then it will not suffer tax. This is the major issue!
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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