U/s 43 b

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 June 2013 Sir,

Interest U/s 36/2 of VAT Act is levied against which and appeal is pending before the commission whether such interest is to be treated as Tax for the purpose of disallowed U/s 43 B of Income Tax Act.If the same is treated as interest then will not be any dis-allowance.

Please give proper suggestion.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 June 2013 Since the interest demand is pending in appeal, until the appeal is decided, it does not become the liability of the assessee.
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However, if the interest liability has been recorded in the books on the basis of the AO's order, it is a kind of tax being known as "whatever" name. For the purpose of Section 43B it should be disallowed.
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Logically, also the above treatment stands in favour of the assessee.
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