The net profit as per Statement of Profit and Loss of Stable Ltd., a resident company for the year ended 31.03.2022 is ₹390 lakh after arrived the following adjustments : (i) Depreciation on Assets 110 lakh (ii) Reserve

CS Professional · Advanced Tax Laws · PYQS · June 2022
The net profit as per Statement of Profit and Loss of Stable Ltd., a resident company for the year ended 31.03.2022 is ₹390 lakh after arrived the following adjustments : (i) Depreciation on Assets 110 lakh (ii) Reserve for currency exchange fluctuation 150 lakh (iii) Provision for Income tax including interest under the Income Tax Act. 80 lakh (iv) Proposed Dividend 220 lakh Following further information are also provided by the company : (a) Net profit includes loss of ₹40 lakh from a subsidiary company. (b) Provision for tax includes ₹2 lakh of interest payable on Income Tax. (c) Depreciation on assets includes ₹30 lakh towards revaluation of assets. (d) Amount of ₹50 lakh credited to P & L account was drawn from revaluation reserve. (e) Brought forward business loss and unabsorbed depreciation as per books are ₹60 lakh and ₹45 lakh respectively for the year ended 31.03.2021. Compute the Book profit of the company u/s 115JB while calculating MAT under the Income Tax Act, 1961 for the year ended 31.03.2022.

Answer & Explanation:

Computation of Book Profit u/s 115JB of Stable Ltd. for AY 2022-23 Particulars Amount (in Lakh) Profit as per P & L account 390 Add: (i) Depreciation on Assets 110 (ii) Amount transferred to reserve for currency exchange fluctuation 150 (iii) Provision for income tax including interest under Income tax Act 80 (iv) Proposed Dividend 220 (v) Loss of Subsidiary company 40 Total 990 Less: (i) Depreciation excluding depreciation on revaluation of assets (110-30) (80) (ii) Amount withdrawn from revaluation reserve credited to P&L a/c to the extent of depreciation on account of revaluation (30) (iii) Lower of brought forward loss ₹60 Lakhs or unabsorbed depreciation ₹45 lakhs as per books (45) Book Profit u/s 115JB 835

Topics: Income Tax

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