| Question And Answer | |
|---|---|
| Subject: | payment u/s 43B |
| Category: | Income-Tax |
| Querist: | Pawan Singla |
| Answered by: | Law Intern |
| Tags: | Explanation 1 to Section 37(1), Section 43B |
| Date: | September 29, 2025 |
Assessee took fraudulent cenvat credit by fake invoices. Admitted the same during search. Upon order of DCGST paid the entire principal amount of duty . Can it ( not interest & penalty) be claimed u/s 43B or will it be hit by Explanation to section 37 ?
It is a debatable issue. In my view, the principal amount cannot be claimed as a deduction under Section 43B, as it is hit by Explanation 1 to Section 37(1). The fraudulent availment of Cenvat credit via fake invoices is an offence. The payment reverses the direct financial gain from this offence and restores the Govt’s loss caused by the fraud.
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