08 December 2012
Balance sheet of f.y.10-11 of a private company has already submitted with ROC howver income tax return has not submitted with income tax deptt. After aproval of balance sheet from shareholders In AGM and its submission to ROC, it comes to the notice that rate of depreciation on some fixed assets has been taken less. Rate should had been taken at 40% instead of 20%. The impact of revision of rate in depreciation would be substantial on book profit and MAT tax also be reduced substantialy. However there are following questions need to be answered: a) Whether company is entitled now to do so b) If company decided to revise the depreciation rate, whould be impact by provision of income tax because it may be considered as afterthought in income tax since it will reduce the tax liability as per MAT of the company.
Please suggest us the right approach to this situation as per income tax provision and company act provisions.
CAclubindia
