Is 35AD Mandatory to follow for Companies (cold storage) under Income tax 1961

[prasadu naladala]

Hi,

We had a company name cold storage and they are receiving govt grant for that business.The cold storage come under 35AD of IT act 1961. now the problem is , Is it mandatory to prepare books of accounts for cold storage company under 35AD of act or can we follow on normal basis of accounting.

eg: construction cost for the cold storage is 7,00,00,000.for normal companies this amount will be shown under the assets side of B\S but under 35AD this fixed asset amount will be allowed as expenditure in P&L A|c.

now is it mandatory for cold storage to take entire 7,00,00,000 as expenditure in P&l need not to disclose in B|S

AI Summary

Company Questions Mandatory Use of Section 35AD for Accounting Construction Costs in Profit and Loss Account A company involved in cold storage, which receives a government grant, is questioning whether it is mandatory to follow Section 35AD of the Income Tax Act, 1961, for accounting purposes. Specifically, they are inquiring if they must treat the construction cost of INR 7,00,00,000 as an expenditure in the Profit and Loss Account, as per 35AD, instead of listing it as an asset in the Balance Sheet. The company seeks clarification on whether they can use standard accounting practices instead of adhering strictly to 35AD requirements.