Is service tax payable disallowance under section 43B?
Andrew Campbell Bombay High Court held that Section 43B does not contemplate liability to pay service tax before actual receipt of the funds in the account of the assesse. Hence the liability to pay service tax into the Treasury will arise only upon the assesse receiving the funds form the customer and not otherwise.
What is Section 40 disallowance?
Disallowance of expenditure under section 40(a)(i) – The amount paid is interest, royalty, fees for technical services or any other sum (not being salary). The aforesaid amount is chargeable to tax in India in the hands of the recipient. The aforesaid amount is paid/payable to a non-resident.
What is Section 43B?
What is section 43B? Section 43b is related to the head ‘ Income from business and profession’. It states some statutory expenses that can be claimed as deduction from the business income only in the year of actual payment irrespective of the year of accrual of its liability.
Can service tax paid be claimed as expense?
Service tax cannot be deducted from the income tax payable by an assessee. However, the cost of any service availed of for business, including the service tax paid, is considered a deductible expense while computing the income under the head ‘Income from business or profession’.
What are tax disallowed expenses?
While computing the profit and gains from business or profession, there are certain expenditures which are disallowed. This means that the income tax department does not allow the benefit of such expenditures and the assesses are required to pay taxes on such expenditures by adding it back to the net profits.
Which expenses are disallowed?
Expenditures disallowed for payment in cash
- Payment to banks, financial institutions, etc.
- Payment to government.
- Payment made by book adjustments.
- Payment for purchase of agricultural products.
- Payment made to cottage industries which are producing without the aid of power.
What is section 37 of Income Tax Act?
—For the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.
What is section 36 of Income Tax?
Expenses allowable as deduction
| Deduction u/s 36 of the Income Tax Act, 1961 | Type of assessee (having income from business or profession) eligible for this deduction |
|---|---|
| Animals used in business which have died or become useless | Any assessee |
| Bad debts written off | Any assessee |
What is the disallowance under section 43B for delayed payment of service-tax?
As Assessee not having routed service tax amount through profit and loss account, there was no question of making disallowance under section 43B on account of delayed payment of service-tax.
Is there any deduction on account of delayed payment of Serice tax?
AO made disallowance on account of delayed payment of serice tax under provisions of section 43B. Assessee submitted that it had not claimed any deduction on account of service-tax amount in its profit and loss account, therefore, provisions of section 43B did not get attracted on account of service-tax payment beyond specified date.
When can sec 40(a)(IA) be pressed into service to disallow deduction?
(xxiii) Only when claim of assessee for deduction is under sec 32 to sec 38, provisions of sec 40 (a) (ia) can be pressed into service to disallow such claims for deduction. Refer, ITO v Ahaaar Consumer Products (P) Limited 10 Taxmann.com 181.
Is the amount of service tax included in the turnover?
There was no obligation on the part of the assessee to show the amount of service tax collected from the customers as part of the turnover. Accordingly, the assessee has not included the amount of service tax in its turnover which has been shown as current liability.
