Book Profit

Disallowance under s 14A and prior period expenses cannot be added for computation of book profit under s 115JB — as held by AhdTrib in ACIT v Gujarat State Energy Generation Ltd — In favour of: The Assessee ; ITA No. 1777/Ahd./2009 : Assessment Year: 2006–2007

Decided on: 15 April 2011

Depreciation — Change in method — The assessee is entitled to claim depreciation as per WDV method instead of SLM method which it has opted earlier by filing a valid revised return before the assessment is made.

Deduction under s 80-IA — Assessee is not entitled to claim deduction under s 80-IA in absence of positive income.

Disallowance under s 14A — Rule 8D is not retrospective and applies from the AY 2008–2009. For earlier years, disallowance has to be worked out on reasonable basis under s 14A(1).

Prior Period Expenditure — Expenses for which liability has crystallised during the year cannot be treated as prior period expenses.