Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2010 (1) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 281 - SC - Income TaxMAT - Tax based on book profits - The assessee, a public sector company supplying electricity, was required to sell electricity to State Electricity Board, Discoms etc, at tariff rate, which consisted of depreciation, advance against depreciation (AAD), interes on loans, interest on working capital, operation and maintenance expenses, and return on equity. - Held that- advance against depreciation (AAD) was not a reserve nor was an appropriation of profit. The assessee could not use AAD for any purpose (which was possible in the case of a reserve) except to adjust it against future depreciation so as to reduce the tariff in the future years. The AAD was an income received in advance. It was a timing difference. Therefore, clause (b) of Explanation 1 to section 115JB (2) of the act was not applicable to AAD.
|