1.
If suppose my sales in profit and loss accounts do not include sales tax (net of sales tax) and the sales tax paid is also not debited to profit and loss account, whether the sales tax payable for the year would be in the ambit of section 43B and i had to pay income tax on the unpaid amount of the sales tax which is under current liabilities and provisions as sales tax payable.
Eg. IF sales tax payable is Rs. 100000/- and the client is under tax audit and if the same amount is not paid within the due date of filing returns then whether the tax on same i.e, Rs. 33600/- would have to paid for the same as disallowance factor under section 43 B.
2.
Or only it is payable if the sales tax amount is debited to profit and loss account and the sales tax amount debited to P & L which is payable within due date is disallowed and tax is payable on the amount debited to P & L A/c.
if in 1st case if 43B is attracted then whether the tax paid is allowed as deduction for the tax to be payable for the subsequent year in which the sales tax is paid.
Pls. suggest.
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44AB
Replies (1)
Dear Friend,
According to section 145 " income under the head PGBP shall be computed according to the method of accopunting regularly followed by the assessee........."
But 145A override section 145 is says " Notwithstanding anything to the contrary contained in section 145, the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be
(a) in accordance with the method of accounting regularly employed by the assessee; and
(b) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.
Explanation. For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.]
therefore you have to compute the effect of section 145A on net profit for the purpose of point no 12(b) of form 3CD
then you take deduction of sales tax etc. so included in p&l A/c u/s 43B only to the extent it is paid till the time prescribed u/s 139(1) and automatically your PGBP will include the sales tax etc. unpaid and you have to pay tax on it
Regards
CA. Nitin Kumar
fcanitin9 @ yahoo.com
According to section 145 " income under the head PGBP shall be computed according to the method of accopunting regularly followed by the assessee........."
But 145A override section 145 is says " Notwithstanding anything to the contrary contained in section 145, the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be
(a) in accordance with the method of accounting regularly employed by the assessee; and
(b) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation.
Explanation. For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment.]
therefore you have to compute the effect of section 145A on net profit for the purpose of point no 12(b) of form 3CD
then you take deduction of sales tax etc. so included in p&l A/c u/s 43B only to the extent it is paid till the time prescribed u/s 139(1) and automatically your PGBP will include the sales tax etc. unpaid and you have to pay tax on it
Regards
CA. Nitin Kumar
fcanitin9 @ yahoo.com
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