Section 43B disallowance fails for unpaid GST where no deduction was claimed in the profit and loss account.

Unpaid GST liability cannot be disallowed under section 43B where the assessee has not debited it to the profit and loss account or claimed it as a deduction. The Tribunal noted that section 43B applies only to a deduction otherwise allowable under the Act, and that consistent co-ordinate bench and High Court authority holds that mere non-payment by the due date does not justify disallowance if the amount was shown only as a current liability. On that basis, the GST disallowance was deleted.

---

---

Issues: Whether disallowance under section 43B of the Income-tax Act, 1961 could be sustained in respect of unpaid GST liability when the assessee had not claimed the amount as an expenditure or deduction in the profit and loss account.

Analysis: The assessee's case was that the GST liability was shown as a current liability and was never debited to the profit and loss account or claimed as a deduction. The Tribunal noted that section 43B operates in respect of a deduction otherwise allowable under the Act and that the relevant co-ordinate bench and High Court decisions had consistently held that where the amount is not claimed as expenditure or deduction, no disallowance can be made merely because the liability remained unpaid by the due date.

Conclusion: The disallowance of GST under section 43B was not sustainable and was deleted.

Ratio Decidendi: Section 43B does not permit disallowance of a statutory liability that has neither been debited to the profit and loss account nor claimed as a deduction by the assessee.

---