Diallowance of pf

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FAIROOS K (Querist)
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26 January 2018 Dear sir

My client who is registered under Kerala Cooperative societies Act , who received a notice from income tax stating that your balance sheet shows EPF liability hence the deduction claimed in the respective year by way of EPF should be reversed and deemed to be income. The party has submitted ROI. Is there any provision/case laws which i can refute the same.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 January 2018 If the EPF liability is remitted before the date of filing the return no reversal is required. Confirm its remitted before filing the return.

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KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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26 January 2018 Section 43B disallows the sum which are not paid in the financial year as well as not paid before due date of filing income tax return. The following sum are allowed in the year in which they are incurred, only if they are paid before the due date of furnishing the return of income under section 139(1) of that year.
Nature of expenses covered under Section 43B –

a) Any tax, duty, cess or fee under any law;

b) Contribution made by employer to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees;

c) Bonus or commission to employees;

d) Interest on any loan or borrowing from any public financial institution or a State financial corporation or a State Industrial Investment corporation;

e) Interest on any loan or advances from a Scheduled bank;

f) Sum payable by the assesse as an employer by way of leave encashment.

Section 43B begins with non obstante clause and hence over rides all other sections in the Act. Even where a deduction is admissible under any other section, it may still not be allowable unless the amount is paid in respect of items covered by this section. Further, the provisions of this Section is relevant only for assessees following mercantile system of accounting.

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RAJA P M

RAJA P M (Expert)
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27 January 2018 Yes... I agreed to Mr KAVIRAJA ADDANGADI Sir... The section says this way to all related liabilities of Any tax, duty, cess or fee under any law, EPF and ESI contribution , etc.,

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