Our actual rent paid/payable as per lease arrangement for F.Y.2009-10 is Rs.21 crores. But as per Accounting Standard 19 (Para 23 of Operating Leases for lease payments under an operating lease should be recognised as an expense in the statement Profit & Loss on straight line basis over the lease terms unless another systemetic basis is more representative of the time pattern of the users benefits). We debited Rs.17 crores in Profit & Loss Account. In computation of income we have claimed full Rs.21 crores but the A.O. is disallowing this Rs.4 crores excess claimed by us which is not debited in Profit & Loss Account but has to be capitalised in the books as per AS19. Are we right or wrong if right please provide a similar case laws or in any other reference which is exactly the same as is our question.
Thanks & Regards,
Pawan Kumar Agarwal
CAclubindia
