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

Section 35AD treatment of capital expenditure may require immediate expensing instead of capitalization, raising disclosure questions. Whether construction cost of a cold storage must be expensed in the profit and loss account under Section 35AD rather than capitalized as a fixed asset is the core issue; the query contrasts the tax provision allowing immediate deduction with normal accounting treatment that shows the cost as an asset on the balance sheet and asks if statutory tax allowance requires taking the full cost to P&L without balance sheet disclosure.