Expense to be disallowed U/s 43B

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Roshni R Rao (Querist)
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23 March 2011 Suppose an Asseesee has claimed a Sales tax expense in A.Y 2009-10 which should have been disallowed U/s 43B of the Income tax Act 1961 since the same was not paid within the due date of filing returns, what will be the tax treatment of the said amount in A.Y 2010-2011 if the amount is not yet paid. I would further like to know under which section of the Income Tax Act the said amount shall be taxable? The assessee is yet to file his retuns for Ay 2010-2011. Kindly reply at the earliest.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 March 2011 Section 43B attracts only if there is a corresponding debit in the profit and loss account. Sales tax of 2009-10 is not reflected in the p & l account of 2010-11,therefore, question of disallowance does not arise in 2010-11.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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23 March 2011 43B is a disallowance section and which may attract if the payment were not paid within the due date specified under the relevant statues.

If the sale tax liability were not paid during one period, then, profit will be adjusted ( added) and if you had not paid the same during the subsequent year, no adjustment is warranted.

On the other hand if you paid the same in next assessment year you can debit the same along with that year sales tax payment.

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