Section 43B(a)

Section 43B(a) — the law in short

What the courts have decided on section 43B(a), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Maruti Suzuki India Ltd v CIT Supreme CourtHelps departmentValidity unconfirmed
  Can I claim a deduction for unutilised MODVAT credit sitting in my books at the year end?
  No. Unutilised credit is not a sum payable by you by way of tax, duty, cess or fee, so s.43B(a) has nothing to operate on. The duty on the inputs was payable by the supplier; what passed to you was the incidence, not the liability.
• CIT v Gujarat Cypromet Ltd Supreme CourtHelps departmentValidity unconfirmed
  The bank sanctioned a fresh loan and the outstanding interest was squared off against it. My books show no interest outstanding. Is that actual payment under section 43B?
  No. Where the accrued interest is not paid back but is adjusted against a further loan from the same institution, Explanation 3C to section 43B applies and there is no actual payment. The Supreme Court allowed the Revenue's appeal and restored the Assessing Officer's disallowance.
• CIT v Noble & Hewitt (I) P Ltd High CourtHelps taxpayer
  The AO disallowed unpaid service tax under s.43B, but I never charged it to my P&L. Is that right?
  No. Section 43B regulates the timing of a deduction and operates only on a deduction actually claimed. Where the levy was carried as a liability in the balance sheet and never debited to the profit and loss account, there is nothing to disallow, and following the mercantile system makes no difference.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.