As long as these charges are not routed through profit and loss a/c, there is no question of disallowance u/s 43B of IT Act, 1961.
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Sec 43B of IT Act.
Replies (21)
i totally agree with shailesh
Thanks to all.
Yes, it is illogical to add back when deduction itself is not claimed. But can somebody through some light on the case laws that are referred.
hello dharmaraju the taxes duty will be disallowed if not paid before due date of return even if not debited to p & l A/c i m giving an example to clarify
let suppose sales amount rs 10000 & vat on that amt rs 400 then entry will be if tax Debited in P& L a/c
Cash A/c Dr 10400
To Sales 10400
and When Tax is paid
P/L a/c (Vat) Dr 400
To Cash 400
if sales for the month of march tax will be paid in next year & will not be debited to P & l A/c current year hence income for the year will be rs 10400
now if tax not debited to P & l A/c Entry will be
cash A/c Dr 10400
To sales A/c 10000
To Output Vat 400
now u have only credited p & l a/c with Rs 10000 so u have to deposit tax before due date otherwise it will be added in ur income and ur income will be Rs 10400
if u r not clear now please reply
hello dharmaraju the taxes duty will be disallowed if not paid before due date of return even if not debited to p & l A/c i m giving an example to clarify
let suppose sales amount rs 10000 & vat on that amt rs 400 then entry will be if tax Debited in P& L a/c
Cash A/c Dr 10400
To Sales 10400
and When Tax is paid
P/L a/c (Vat) Dr 400
To Cash 400
if sales for the month of march tax will be paid in next year & will not be debited to P & l A/c current year hence income for the year will be rs 10400
now if tax not debited to P & l A/c Entry will be
cash A/c Dr 10400
To sales A/c 10000
To Output Vat 400
now u have only credited p & l a/c with Rs 10000 so u have to deposit tax before due date otherwise it will be added in ur income and ur income will be Rs 10400
if u r not clear now please reply
hello dharmaraju the taxes duty will be disallowed if not paid before due date of return even if not debited to p & l A/c i m giving an example to clarify
let suppose sales amount rs 10000 & vat on that amt rs 400 then entry will be if tax Debited in P& L a/c
Cash A/c Dr 10400
To Sales 10400
and When Tax is paid
P/L a/c (Vat) Dr 400
To Cash 400
if sales for the month of march tax will be paid in next year & will not be debited to P & l A/c current year hence income for the year will be rs 10400
now if tax not debited to P & l A/c Entry will be
cash A/c Dr 10400
To sales A/c 10000
To Output Vat 400
now u have only credited p & l a/c with Rs 10000 so u have to deposit tax before due date otherwise it will be added in ur income and ur income will be Rs 10400
if u r not clear now please reply
Hi Tarun,
Thanks for taking so much trouble to clarify. I can understand all these logics and have clearly stated that there can be no question of disallowance when deduction itself is not claimed.
Please go through the case laws referred by me and help if possible. Please let me know if these decisions are reversed subsequently.
Regards
Dharmaraju
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