Definition of profit and gain u/s 80IC

This query is : Resolved

TARUN BANSAL (Querist)
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30 August 2009 Deduction u/s 80IC shall be out of profit and gains. Whether the profit and gains shall be calculated after deduction of depreciation u/s 32 or deduction u/s 80-IC shall be independent to the deduction u/s 32. The assessee has not charged depreciation in the books of accounts and has claimed the same in the computation of taxable income.

Since 80-IC is allowed on profit and gains. Profit and gains are specified u/s 28. 80-IC does not say that It is allowed on profit and gains calculated under the head profit and gains. It means 80-IC should be allowable on profit and gains mentioned under 28 and depreciation claim u/s 32 is independently be allowable.

CP Ram

CP Ram (Expert)
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30 August 2009 Profit and gains claimed and allowed as deduction u/s 80IC shall be calculated after deduction of depreciation u/s 32.

Further, according to explanation 5 to the section 32, depreciation allowable u/s 32(1) is mandatory and therefore shall be allowed even if the assessee has not claimed the deduction in respect of depreciation in computing his total income.