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Lease equalization charges not to be added back in computing book profits U/s. 115JA
Case Law Details
- Case Name
- Commissioner Of Income Tax Vs. M/s. Mgf India Ltd. (Delhi High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Delhi High Court
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CIT Vs. M/s. MGF India Ltd. (Delhi High Court)
Lease equalization charge is a method of re calibrating the depreciation claimed by the assessee in a given accounting period. The method employed by the assessee, therefore, over the full term of the lease period would result in the lease equalization amount being reduced to a naught, as the debits and credits in the profit and loss account would square off with each other. Under the circumstances, the same is neither in the form of a reserve nor a deduction.
Lease equalization charge is not in the nature of a reserve, inasmuch a...
