Disallowance U/s 43B

This query is : Resolved 

Querist : Anonymous (Querist) 07 January 2011

Whether the following are disallowed if they are not passed through P&L and not paid within duedate u/s 139?

1.FBT Payable
2.Income tax payable
3.TDS Payable
4.Vat Payable(Following exclusive method)

Anshul (Expert)
07 January 2011

Yes will be disallowed ..

Manmohan ACA, CS (Expert)
07 January 2011

All disallowed

Querist : Anonymous (Querist) 07 January 2011

is it disallowed even these are not debited to P&L?

Aditya Maheshwari (Expert)
07 January 2011

I think both the experts has answered wrongly on the answer without uderstanding the query.
Answers for the same are as follows:
1 & 2. FBT & Income tax is never allowed as a deduction for the purpose of computing total income whether debited to P & L or not. If not debited to P & L then there is no reason for it to be disallowed as no expenses have been claimed and if debited to P & L A/c then it will be added back to total income for the purpose of computing taxable income.

3. If TDS is payable and not paid before the due date of filing return then the expenses on which TDS is deducted but not paid will be disallowed and not TDS payable.

4. For VAT following exlcusive method there are both views as it is sometimes also treated as trading receipt and hence disallowed and sometimes as not debited to P & L A/c not disallowed u/s 43B. But in my view it should be disallowed.

CMA. CS. Sanjay Gupta (Expert)

07 January 2011

Completely agree with Aditya....

In case of TDS not deposited within due date of filing return expenses are disallowed and not the amount of TDS payable.
Further these are not even passed through P/L so how can it be disallowed.
If income tax late deposited there is sec 234A & 234B to take care of it. Income Tax & FBT are tax liability and not expenses which we claim from total income.

Querist : Anonymous (Querist) 07 January 2011

Thank u Aditya..

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