Disallowance u/s43B of the Incometax Act

[Gopalarathnam Muralidharan]

In our company, salestax, service tax, duties etc are routed through Balance sheet. But AO wants to disallow certain taxes which were beyond the stipulated date. We objected to saying that Sec43B has no application as the taxes etc are routed through Balance sheet. But AO wants to have Sec145A workings to find out taxes impact on Profit and Loss. Is it correct

[CA Rachit Agarwal]

At the time of Tax Audit, Form 3CD, Clause-12(b), we have to state the deviation and effect on Profit/Loss by the virtue of Section 145A.

Hence AO contenttion is right.

However there are guidelines which is enumerated in the "Guidance to Tax Audit" published by ICAI, in which your content could also be held right.

AI Summary

Company Challenges Tax Disallowance Under Section 43B, Disputes AO's Application of Section 145A Impacting Profits A company is disputing an assessment officer's (AO) decision to disallow certain taxes under Section 43B of the Income Tax Act, arguing that these taxes are routed through the balance sheet, making Section 43B inapplicable. The AO insists on applying Section 145A to assess the tax impact on profit and loss. A chartered accountant advises that during a tax audit, deviations and their effects on profit or loss must be reported as per Form 3CD, Clause-12(b), supporting the AO's stance. However, guidance from the ICAI suggests that the company's position might also be valid.