11 October 2009
Explaination to subtraction 115 JB allows booked Profit to be Reduced by the amount as per clause (V), amount of brought forward loss or unabsorbed Depreciation whichever is less as per Books of Account.
In F Y 2006-07 company has Loss before Depreciation Rs.60 lacs(i.e.before CY Dep.Rs.40 lacs & before Prior period depreciation as stated below Rs.70 lacs), Current year Depreciation:Rs. 40 lacs, Prior period Depreciation due to change in method from WDV to SLM credited to P & L a/c:Rs. 70 lacs.
What will be the Status of Reduction/adjustments allowable under clause (v) if i am working for 115jb in A.Y.2009-2010 where company has a book profit ? whether Book Profit for A.Y. 2009-201 should be increased by net amount of depreciation credited by Rs.30 lacs?
11 October 2009
As per 2nd para of the query Carried forward business loss = Rs. 60Ls. Carried forward depreciation = Rs. Nil So no question of adjustment as per clause (v) arises.
If prior period depreciation is credited in P& L account prepared as per schedule VI of The Companies Act,1956, then addition on account of Rs. 30 Ls, as per 3rd para of the query,does not arise.
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