For Income Tax purpose, when service tax is shown as payable in balance sheet and not shown in P& L account , will this be disallowed and added to total income ? Please clarify.
3 Replies
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 12 December 2012
How can it be showing as payable in Balance Sheet, without passing from P&L A/c.....
What entry did you pass for it?
It would be disallowed u/s 43B of I.T. Act, 1961.
CA Ankit Totla
(Practicing Chartered Accountant)
(469 Points)
Replied 12 December 2012
If service tax is not routed through P/l Account, no question of disallowances occur since it is not booked as expense.
Advised to check the Service tax entry methods..!!
Pakshal Shah
(Practicing Chartered Accountant)
(271 Points)
Replied 12 December 2012
It won't be added back provided you haven't routed the same through P/L A/c. For futher clarification refer the following case law :
CIT Vs.Real Image media Technologies (P) Limited [2008]114ITD573(Chennai)
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