Section 43B of the Income Tax Act

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..... Section 43B of the Income Tax Act
Query (Issue) Started By: - Amit Sharma Dated:- 27-11-2011 Last Reply Date:- 29-11-2011 Income Tax
Got 2 Replies
Income Tax
My query is related to section 43B of the Income Tax Act which states that certain payments of liabilities shall be allowed on actual payment basis irrespective of method of accounting employed. My query is that whether the Asse .....

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..... ssing Officer can disallow any tax liability which has not been debited in Profit and Loss Account? For example if a service provider have outstanding output service tax liability as on 31st March and the same has not been paid on or before due date of filing of returns then can Assessing Officer make addition even the same has not been routed through profit and loss account? Reply By CA Rachit .....

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..... Agarwal: The Reply: Dear Anilji Please also refer Section 145A according to which income should be inclusive of "tax, duty, cess or fee". Hence output tax should be include in the value of services for the computation of income and at arriving at Net Profit. According to which Output Service Tax should have included in the sales, deduction would be allowed on payment basis. Therefore Assessing .....

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..... Office is right in making addition even if the output service tax is not passed through PL. You will be eligible for deduction when the output service tax has been paid. Regard Rachit Agarwal, [email protected] Reply By PANKAJ GROVER: The Reply: Dear Amit Expenses which was otherwise allowable can be disallowed by AO u/s 43B, service tax, vat, excise duty for part of p&l irrespective .....

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..... of the method of accounting. Therefore AO can disallow service tax even though the same has not been passed through p&l account. Further TDS liability can not be disallowed by AO because the same is otherwise not allowable as expenses.
Discussion Forum - Knowledge Sharing .....

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