A Private Limited company running resorts. depreciation charged for Fixed Assets like Building, furniture, AC & other items @ 4.75%. for computer charged @ 16%.
if depreciation is charged @ rate as prescribed 15%, 60%. then company would be incurring LOSS. but now in P/L profit has been arrived only because depreciation is charged at lower rate.
in Annexure to audit report mentioned as for depreciation charged at rate as applicable depending on the useful life of the asset.
NIL return filed due to depreciation deducted as per IT Act. loss carry forward for next year.
this practice has been followed since 6 years when the company was started.
Please confirm if it is allowed to charge depreciation at such lower rate.
CAclubindia
