section 43B

Decoding tax issues on insolvency code

Income Tax - De-coding the tax implications upon insolvency Non-Performing Assets (NPAs) have become an abiding issue with the Indian banking industry impacting the credit quality of bank loans.  The state of the bankruptcy process, prior to introduction of the Insolvency and Bankruptcy Code, 2016 (IBC) was highly fragmented which posed a deterrent ...

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Contribution of Land or Building in a partnership firm: Tax Impact

Income Tax - Many times it happens that a person contributes capital in a partnership firm in the form of land or building in order to become a partner. It has been noted that the tax consequence in such cases is not clear since two sections comes into play in such kind of transactions-Section 45(3) and Section 50C of the Income Tax Act, 1961. The afo...

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PF liability – Where to disclose in Tax Audit?

Income Tax - This article had been presented before you all with an intention to provide clarity in relation to correct disclosure in Tax Audit regarding Clause number for Provident Fund contribution and Due date to be mentioned in those clauses....

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All about DEFERRED TAX and its entry in books

Income Tax - The word Deferred is derived from the word Deferments which means arranging for something to happen at a later date. Thus, deferred tax is the tax for those items which are accounted in Profit & Loss A/c but not accounted in taxable income which may be accounted in future taxable income & vice versa. The deferred tax may be a liability or...

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Section 43B to include certain payments made to Railways

Income Tax - With a view to ensure the prompt payment of dues to Railways for use of the Railway assets, it is proposed to amend section 43B so as to expand its scope to include payments made to Indian Railways for use of Railway assets within its ambit....

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Section 36(1)(va) Increase Due date for crediting contribution of employees to due date of ROI

Income Tax - specified under the relevant legislation of the fund. The employees contribution credited to the employees account in the relevant fund after the due date specified under section 36(1)(va) are disallowed to the employer. Further, any payments made by the employer after the due date is also NOT allowed as a deduction in the year of payment...

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Provision for Gratuity & Leave Encashment not Allowable

Income Tax - Before 2008-09, deduction towards leave encashment and gratuity was a controversial issue following a Calcutta High Court judgment in the case of Exide Industries. The court ruled in favour of Exide and against the revenue department, saying that such provisions whether paid or not were eligible for deductions on the basis of actuarial va...

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Deduction U/s. 80-IA allowable on amount disallowed U/s. 43B

Dy. CIT Vs TA Infra Projects Ltd. (ITAT Hyderabad) - As amount disallowed under section 43B would become profits of business in the computation of income under the head "Profits and gains of business or profession". Consequently, if the amounts disallowed were pertaining to the projects on which the claim under section 80-IA was made, the same had to ...

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Amendment in sec 43B is curative in nature and applies retrospectively

M/s. Simbhauli Sugar Mills Ltd. Vs. Addl. CIT (Allahabad High court) - Hon'ble Allahabad High court has in the case of M/S Simbhauli Sugar Mills Ltd in ITA No 607 of 2011 has held that amendment is sec 43B is curative in nature and would apply retrospectively....

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No deduction allowed U/s. 43B of amount standing in ‘Sales-tax Recoverable A/c‟

Maruti Udyog Ltd. Vs. CIT (Delhi High Court) - Whether the ITAT has committed an error of law in upholding the dis allowance of Rs. 3,08,79,171 in respect of Sales Tax Recoverable account, under Section 43B of the Income Tax Act?...

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SC Allows Deduction of Excise Duty Paid in Advance in PLA

CIT Vs M/s Modipon Ltd. (Supreme Court of India) - CIT Vs M/s Modipon Ltd. (Supreme Court) Purpose of introduction of Section 43B of the Central Excise Act was to plug a loophole in the statute which permitted deductions on an accrual basis without the requisite obligation to deposit the tax with the State. Resultantly, on the basis of mere book ent...

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Section 43B: Municipal Tax Arrears allowable in the year of payment

ITO Vs. Sudhir Satnaniwala (ITAT Kolkata) - ITO Vs. Sudhir Satnaniwala (ITAT Kolkata) It is observed that the deduction claimed by the assessee on payment of municipal tax arrears was disallowed by the A.O. on the ground that the said expenditure pertained to the earlier years and the assessee was not liable to pay the same. Since the corresp...

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Chapter VIA deduction on enhanced profits after disallowance eligible

Circular No. 37/2016- Income Tax - (02/11/2016) - Disallowances made under sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter ...

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Section 43B: CBDT clarifies Due date for payment of Employee Provident fund

Circular No. 22/2015-Income Tax - (17/12/2015) - Income Tax Circular No. 22/2015 W.c.f. 1.4.1988, the settled position is that if the assessee deposits any sum payable by it by way of tax, duty, ecss or fee by whatever name called under any law for the time being in force, or any sum payable by the assesse as an employer by way of contribution to ...

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Recent Posts in "section 43B"

Deduction U/s. 80-IA allowable on amount disallowed U/s. 43B

Dy. CIT Vs TA Infra Projects Ltd. (ITAT Hyderabad)

As amount disallowed under section 43B would become profits of business in the computation of income under the head "Profits and gains of business or profession". Consequently, if the amounts disallowed were pertaining to the projects on which the claim under section 80-IA was made, the same had to be allowed as profits get increased to t...

Read More

Section 36(1)(va) Increase Due date for crediting contribution of employees to due date of ROI

specified under the relevant legislation of the fund. The employees contribution credited to the employees account in the relevant fund after the due date specified under section 36(1)(va) are disallowed to the employer. Further, any payments made by the employer after the due date is also NOT allowed as a deduction in the year of payment...

Read More
Posted Under: Income Tax |

Decoding tax issues on insolvency code

De-coding the tax implications upon insolvency Non-Performing Assets (NPAs) have become an abiding issue with the Indian banking industry impacting the credit quality of bank loans.  The state of the bankruptcy process, prior to introduction of the Insolvency and Bankruptcy Code, 2016 (IBC) was highly fragmented which posed a deterrent ...

Read More
Posted Under: Income Tax |

Amendment in sec 43B is curative in nature and applies retrospectively

M/s. Simbhauli Sugar Mills Ltd. Vs. Addl. CIT (Allahabad High court)

Hon'ble Allahabad High court has in the case of M/S Simbhauli Sugar Mills Ltd in ITA No 607 of 2011 has held that amendment is sec 43B is curative in nature and would apply retrospectively....

Read More

No deduction allowed U/s. 43B of amount standing in ‘Sales-tax Recoverable A/c‟

Maruti Udyog Ltd. Vs. CIT (Delhi High Court)

Whether the ITAT has committed an error of law in upholding the dis allowance of Rs. 3,08,79,171 in respect of Sales Tax Recoverable account, under Section 43B of the Income Tax Act?...

Read More

SC Allows Deduction of Excise Duty Paid in Advance in PLA

CIT Vs M/s Modipon Ltd. (Supreme Court of India)

CIT Vs M/s Modipon Ltd. (Supreme Court) Purpose of introduction of Section 43B of the Central Excise Act was to plug a loophole in the statute which permitted deductions on an accrual basis without the requisite obligation to deposit the tax with the State. Resultantly, on the basis of mere book entries an assessee was […]...

Read More

Section 43B: Municipal Tax Arrears allowable in the year of payment

ITO Vs. Sudhir Satnaniwala (ITAT Kolkata)

ITO Vs. Sudhir Satnaniwala (ITAT Kolkata) It is observed that the deduction claimed by the assessee on payment of municipal tax arrears was disallowed by the A.O. on the ground that the said expenditure pertained to the earlier years and the assessee was not liable to pay the same. Since the corresponding rental income received […]...

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Sec. 43B: Amusement Tax paid before due date of Filing Income Tax Return is eligible for deduction

Ratan Saha Vs. ITO (ITAT Kolkata)

The Kolkata bench of Income Tax Appellate Tribunal recently ruled that Amusement Tax paid before the due date of filing of Income Tax Return is eligible for deduction under the Income tax Act, 1961. ...

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Tax planning opportunity by SC?

CIT Vs. M/s Modipon Ltd. (Supreme Court of India)

The decision relates to deductibility of excise duty u/s 43B of the Income Tax Act, 1961. Section 43-B requires cumulative existence of following; The deduction claimed by the Assessee must be otherwise allowable under the other provisions of the Act....

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Posted Under: Income Tax |

Advance payment of Duty in PLA account eligible for deduction: SC

CIT Vs. M/s Modipon Ltd. (Supreme Court of India)

Advance deposit of central excise duty constitutes actual payment of duty within the meaning of Section 43B of the Central Excise Act and, therefore, the assessee is entitled to the benefit of deduction of the said amount....

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