DISALLOWANCE
This query is : Resolved
CA Kaustubh Khiste
(Querist)
13 July 2011
DIS ALLOWANCE U/S 43(b) OF IT ACT 1961 SPEAKS THAT ANY GOVERNMENT LIABILITY UNPAID UP TO THE DATE OF FILING OF RETURNS SHALL BE DISALLOWED WHILE COMPUTING THE TAXABLE INCOME.
MY QUESTION IS : WHAT IF THE TAX LIABILITY FOR SERVICE TAX OR VAT HAS NOT BEEN PAID UP TO SAID PERIOD AND WHICH HAS NOT BEEN ROOTED THROUGH P&L A/C. HOW DOES THE DIS ALLOWANCE WORKS,SINCE SUCH LIABILITY HAS NOT BEEN INCLUDED IN P&L AND DOES,T HAVE ANY IMPACT ON PROFIT. e.g : ENTRY FOR SALES:
DEBTORS A/C ________Dr. 1,10,000
TO SALES A/C 1,00,000
TO VAT/SERVICE TAX A/C 10,000
(grouped as duties and taxes
under current liabilities)
ASSUMED THE PROFIT TO BE 1,00,000.00 WHAT SHALL BE DISALLOWED.
MY QUESTION IS : WHAT IF THE TAX LIABILITY FOR SERVICE TAX OR VAT HAS NOT BEEN PAID UP TO SAID PERIOD AND WHICH HAS NOT BEEN ROOTED THROUGH P&L A/C. HOW DOES THE DIS ALLOWANCE WORKS,SINCE SUCH LIABILITY HAS NOT BEEN INCLUDED IN P&L AND DOES,T HAVE ANY IMPACT ON PROFIT. e.g : ENTRY FOR SALES:
DEBTORS A/C ________Dr. 1,10,000
TO SALES A/C 1,00,000
TO VAT/SERVICE TAX A/C 10,000
(grouped as duties and taxes
under current liabilities)
ASSUMED THE PROFIT TO BE 1,00,000.00 WHAT SHALL BE DISALLOWED.
CA Navin Jain
(Expert)
13 July 2011
Rs. 10000 will be disallowed, since assessee has book the profit of Rs. 100000 and considering his income also.
CA Kaustubh Khiste
(Querist)
13 July 2011
tahnks sir so book profit 1,00,000 and disallowed 10,000.00 so taxable income shall be 1,10,000.00
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