Carry forward of Unabsorbed Depreciation -Sec 10B

This query is : Resolved

Subbaiya (Querist)
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23 August 2007 We have availed exemption u/s 10 B
We have unabsorbed depreciation for three years as there was no profits. Can we carry forward the unabsorbed depreciation and set off against profits in the future year 1) when we still avail 10B benefits and have domestic sales
2) after completion of 10B exemption period

Thanks & Regards

CA Mani

CA Mani (Expert)
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23 August 2007 Yes. Read Sec.32.

Irrespective of exemption availed, it can be carried forward.

Raj

Raj (Expert)
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23 August 2007 1. In my opinion you cannot carry forward to unabsorbed depreciation. Sec.10B is relating to 100% EOU , exemption available to the proportion of export turnover , if your company have domestic sales then just check in domestic terrif how much sale to be deemed as an export(say 25% ) , if it is not qualify for full exemption then pro rata deduction is available as certified in F.N 56G by an accountant.
2.After holi day period business will treat a freash as per normal provision of income tax.

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Jitender

Jitender (Expert)
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23 August 2007 yes it can be carried forward.

Subbaiya

Subbaiya (Querist)
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23 August 2007 But in Singhania's Ready reckoner para 104.6 says "In the assessment year following period of deduction, the depreciation will be computed on the WDV of the asset as if the Dep has actually been allowed in respect of each assessment year falling in the period of exemption"

Doesnt it imply that once 10B is claimed the profit/loss for that year is exempt and no loss/unabsorbed dep can be carried forward

There is specific provision for not carrying forward unabsorbed dep prior to AY 2000-01 (Ref in the same para)

madhusudan

madhusudan (Expert)
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24 August 2007 It is very clear from the same para that there is no restriction regarding the carry forward of unabsorbed depreciation after the A.Y. 2000-01. It is immaterial whether the period for Sec 10 B is over or not.