Amir (Learner) (4016 Points)
17 April 2010HI Members,
Pls share ur views on this -
Whether Sec 43B can be extended to dissallow depreciation on the duties & taxes(like entry tax, etc) included in the cost of fixed assets and not paid till the due date of filing return of Income??
Thanks & Regds
yogeshwar malhotra
(partner)
(112 Points)
Replied 17 April 2010
no . as per section 43b only those exp are to be disallowed which are dbeited to pl a/c
Amir
(Learner)
(4016 Points)
Replied 17 April 2010
| Originally posted by : yogeshwar malhotra | ||
 |
no . as per section 43b only those exp are to be disallowed which are dbeited to pl a/c |
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Dear Sir,
Thanks for ur reply but with due respect I would say Depreciation is also debited to P& LA/c only .......
Ratan Deep Saxena
(Asstt Manager (Accounts & Finance))
(2998 Points)
Replied 17 April 2010
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 17 April 2010
Nicky
(Chartered Accountant)
(245 Points)
Replied 17 April 2010
Amir pretty interesting query...
There was a similar discussion wherein it was discussed that if TDS is not deducted on Fixed Assets then depreciation would be disallowed, which is almost in line with your thought process for 43B...
I would simply follow the rule of beneficial interpretation, "What suited thou, unless not against the act, would be followed"
GAURAV JAIN
(C.A. F!N@L Group-1 Clear...)
(278 Points)
Replied 17 April 2010
its very good question....
if entry tax is included in the cost of fixed asset then question of deduction u/s 43B will not be arise and depreciation will be allowed in p&L a/c...
whether i m right or wrong?????
plzzzz clarify this....
Amir
(Learner)
(4016 Points)
Replied 17 April 2010
Dear Nicky Sir,
I am not sure but I feel -
"Beneficial rule" is always used to extend the meaning underneath the provision i:e in cases of ALLOWANCE whereas 43B is a section of DISALLOWANCE & here instead of giving extended meaning we are restricting the provision.
So I think not possible...
Sumit K. Garg
(Article Assistant)
(40 Points)
Replied 17 April 2010
Dear Amir,
I m agree with u that Depreciation is also debited to P&L a/c but depreciation to the extent cannot be disallowed because same case is 40A(3). This section disallows only expenditure if exceeds 20000/35000/- in cash but we purchase fixed assets in cash and claims depreciation. On that FA, depreciation is allowed u/s 40A(3).
Law is very clear that entry tax will be disallowed not depreciation.
Regards,
Sumit K. Garg
CA Ghanshyam Joshi
(CA, Dip IFR (ACCA UK))
(3229 Points)
Replied 17 April 2010
Dear Amir,
Very interesting query.
Sec 43B says about amounts debited to profit and loss account. Entry Tax on merchandise goods should be debited to P&L and it should be paid by due date of filling of return. In this case the entry tax is for fixed asset and it is capitalized along with Fixed Asset. Hence question of dissallowance does not arise. Neither partial depreciation relating to entry tax be disallowed not the amount of entry tax.
CA.PRAMOD KUMAR PANDA
(Chartered Accountants)
(204 Points)
Replied 17 April 2010
Section-43B is for disallowance of expenses debited to the Profit & loss Account. Depreciation is not an expenses. It is an allowance and therefore the provision of Section 43B is not attracted. Similar is the case with purchase of Fixed Assets valuing more than Rs.20000/- by cash payment. The payment cannot be disallowed U/S 40A(3), since the expenses is of capital nature and not debited to the Profit & Loss account. Also in the year of acquisition of such assets, the depreciation claimed and debited to the Profit & Loss Account cannot be disallowed, since its an allowance.
DT Fundas - Tarun rustagi
( Author)
(1150 Points)
Replied 17 April 2010
dear amir,
under section 43b only those expenditure will be disallowed which require ctual payment of expenditure like bonus,interest.if u take the case of fixed asset payment duty then duty will be disallowed but there is no relation of depreciation with section 43b bcoz it does not require payment.
regards
tarun rustagi
Girish Mathuria
(STUDENt)
(138 Points)
Replied 18 April 2010
in 43B expense can be disallowed only when actual payemnt is not done on aur before the due date for payemnt
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 18 April 2010
DT Fundas - Tarun rustagi
( Author)
(1150 Points)
Replied 18 April 2010
i agree with u dear ayush but make me correct
if the expenditure in respect of construction of building like payment made to contractor against constract work done by him without tds deduction is disallowed in spite of capital expenditure and the same will not form part of the cost of building and when this will not added to the cost then how can we claim depreciation on this
CAclubindia
