18 August 2012
There are lots of differences in allowability and chargeability of depreciation as per companies act and income tax act like in case of lease, lessor gets depreciation under companies act if it is finance lease but in income tax owner gets depreciation.
If income tax rates are followed then it may not show the correct picture of the profit. and on other hand, if it is allowed as per the companies act, then there may be manupulation in the accounts by the assessee. Like Depreciation is mandatory in case of IT act but the same is not mandatory under companies act.
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