Scientific Resarch

An asset purchased (suppose for Rs.10lacs)  under section 35(2AB) i.e, scientific resarch. and is sold in the same PY for Rs.12 LAc

 

What will be the tax liability for the company?

Is it should get deduction of 150%

Kinddly bifurcate what amount shall to tocapiatal gain, business profit and amount of deduction

Replies (2)

to the best of my knowledge i would suggest that the provisions of sec 41 will be applicable to it "recovery of amt spent on the scientific research assets shall be allowed to the extent deduction was allowed in past"

thus12lacs-15lacs=-3lacs(income(loss) from business)

HI anuj,

Well thought out queston..

Sec 35(2AB) - Deduction of 150% shall be allowed since there is no condition that asset should exist as on last day on the PY. Nevertheless it must be used for the purposes of Scientific  Research.

Sec 50 cannot be appled on its sale since for that depreciation must have been claimed in 1 year at least.

Even Sec 41(3) cannot be applied since it doesnot cover sec 35(2AB)

So we have left with Sec 48 & Sec 41(1) -

Rs. 2 lakhs will be STCG u/s 48

Rs. 10 lakhs will be chargeable as PGBP u/s 41(1)

This way assesee will be get PGBP Deduction of 5 lakhs (Net) & 2 lakhs as STCG.

Is this correct or I m missing out on something? Members, pls express ur views..... 

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