Book-vs-tax, deferred tax and an audit trail that holds up

Book and tax depreciation were reconciled in a spreadsheet maintained by one person, and the deferred-tax working had quietly drifted — a limited review found the deferred tax liability understated by ₹2.3 Cr, forcing a restatement and a modified opinion. There was no audit trail showing who had changed asset costs or lives. On the tax side, the written-down value of the plant & machinery block didn't reconcile: sale proceeds on disposed IT and office assets had not been reduced from the block, and the resulting section 50 short-term capital gain treatment was challenged in assessment.

Companies Act and Income-tax depreciation were run in parallel from one register, producing a block-wise Book vs Tax deferred-tax report with the year's movement. Disposals were tied to the correct blocks, and every change was captured in an immutable, role-scoped audit trail.

Deferred tax reconciled to the rupee against the tax base, the restatement risk closed out, and the block WDV — with disposals correctly knocked off — gave the company clean workings to defend the section 50 position.