Whether unpaid vat included in income as per sec.43 b

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Vijender Bisht (Querist)
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21 April 2015 In A.Y 2014-15, VAT payable in a company is Rs.10 Lac as on 31.03.14, from which Rs.6 Lac paid before filling return under sec.139(1). Unpaid VAT payable of Rs.4 Lac, whether included in taxable income or not.
Please reply with decided case law if any

CA Mohit Bansal

CA Mohit Bansal (Expert)
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21 April 2015 There is no case law for the baove case. Section 43B clearly states that the unpaid taxes till the date of filing of return of income shall not be allowed as an expenditure in that year but can be claimed in the year of actual payment

Vijender Bisht

Vijender Bisht (Querist)
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22 April 2015 Thanks Sir for above reply.
But VAT payable is not our expenditure, it is current liability, which is not paid till the date of filling of IT return. In 26 point of Audit report(3CD), which deal with Sec.43B contain a column "Whether passed through P&L a/c" in which we mention that VAT payable is not passed through P&L a/c, that's why we do not disallow VAT payable in our computation.
Secondly Sec.43B is for deductions only. Now my question is VAT payable(Tax) why included in Sec 43B

CA Mohit Bansal

CA Mohit Bansal (Expert)
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22 April 2015 Yes. Irrespective of the treatment given in books of accounts, it is a liability to be paid before filing of return of income otherwise you have to add it in your income if remain unpaid

Vijender Bisht

Vijender Bisht (Querist)
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23 April 2015 Sir, I study a case law CIT v Associated Pigments Ltd., As per this case If assessee has collected the sales tax in seperate sales tax a/c & debited the same a/c with sales tax payable, then sec.43B shall not be applicable. Sir also study sec.145A.
Sir, please guide me whether unpaid VAT to include in taxable income or not?

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