Section 43B query

Dear Rajesh, From what you have stated, your auditor is under some misconception you are not.You insist on your protest being mentioned in the audit report  in form No.3CD

Dear Mr. Poddar,

In case of above matter I think that assessee is not allowed a deduction of service tax which is collected on behalf of governmebt and paid to government. Assessse acts as an agent on behlf of government and is not entitled to deduction of service tax.

Section 43B is applicable in cases where deduction is allowable but the assessee has not paid the relevent within the due date or before filing return of income.

Service Tax libility arises on receipt basis. So under accrual method of accounting service tax outstanding in the books may not be the actual liability.

Hence in case of service tax section 43B is not applicable.

Dear Mr. Rajesh

I have gone thru your case i m agree with u that any expenses which is not debited to P&L a/c, how it can be disallowed and added to income.

but you will have to intepret section 43B widely

just like this

anything which is payable by u that means your expenses and not paid is presently your liability,

now anything which is your liability, it can be due to this

1 your expenses not paid off

2 any thing which is received during the course of your business due to your business, but not yet paid

if u'll broaden your intepretation, and see from ITO's point of view

u'll come to know that anything u received is your income, wither sales revenue or loan or capital whatever u receive.

and whatever u pay is your expense either payment of your expenses or payment agsinst your expenses

that means any expeses which is payable by u is not paid till date should not be treated as expesnes, and anything which u received as income and not paid by u is yur liability,

here income which is not accounted for by u in your p&l a/c not it should be added to your income

and it should cover only cases refered in section 43B for Government liability (your own liability) liability created on behalf of others toward governemnt

Sandeep K.

+919826111513

Actual sales amount received is 112.36 (which was segregated into sales and service tax) But u r showing onlly 100 as income which means u r not showing 12.36 as income but as service tax. ie the income is understated if ST not paid. so the assessing officer is right in disalowing it coz the service tax has not been paid. Similar treatment wit teleph exp.

There is a recent judgmeent supporting your view . Refer 114 ITD 0573 Chennai ITAT in the case of Real Image Media Technologies Pvt. Ltd vs. ACIT.  
 

i want the deatilas of deduction  u/s 43b of income tax act 1961 or any notficaton

mail me at vinaychajed @ gmail.com