Quiz for the week (01 Jan 2024):
Amit (P) Ltd is engaged in
manufacturing activity. It has the following:
|
Asst.year
|
Unabsorbed depreciation as per books of account
|
Brought forward business loss as per books of
account
|
|
2018-19
|
5,00,000
|
6,50,000
|
|
2019-20
|
9,00,000
|
1,00,000
|
|
2020-21
|
Nil
|
3,00,000
|
|
2021-22
|
4,50,000
|
3,60,000
|
|
2022-23
|
2,50,000
|
1,50,000
|
Decide how much of the amount given
above is eligible for deduction for computing "Book-profit" under section 115JB
for the assessment year 2023-24?
Best Answer :
Clause (iii) of Explanation 1 to 115 JB says
that the amount of loss brought forward or unabsorbed depreciation whichever
is less as per books of account is eligible for deduction for computing book
profit.
This would lead to considering either
depreciation or business loss, whichever is less being reckoned in the process.
The CBDT in Circular No.495 dated 22nd September, 1987 has clarified
that the cumulative figure has to be considered for this purpose and not on
yearly basis.
There are legal decisions such as CIT
v. Adoon Electronics (P) Ltd (1998) 232 ITR 528 (MP); CIT v. Shree Synthetics
Ltd (1998) 233 ITR 333 (MP) supporting such view.
|
Asst.year
|
Unabsorbed depreciation
|
Brought forward business loss
|
|
2018-19
|
5,00,000
|
6,50,000
|
|
2019-20
|
9,00,000
|
1,00,000
|
|
2020-21
|
Nil
|
3,00,000
|
|
2021-22
|
4,50,000
|
3,60,000
|
|
2022-23
|
2,50,000
|
1,50,000
|
|
Total
|
21,00,000
|
15,60,000
|
Thus, the amount eligible for
deduction under section 115JB would be Rs.15,60,000.
CA SAUMIL JAIN
Ahmedabad
|