Expense Allowed or not

This query is : Resolved

RAMNATH.R (Querist)
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30 November 2007 My vendor has raised a invoice for a prior period Interest...will this be a allowable expense in my books...

R.V.RAO

R.V.RAO (Expert)
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30 November 2007 PRIOR PERIOD EXP. ARE DISALLOWED BY THE ASSESSING OFFICER SINCE SEC. 37 OF INCOME TAX ACT PROVIDES THAT ANY EXPENDITURE TO BE DEDUCTIBLE MUST HAVE BEEN INCURRED BY THE ASSESSEE DURING THE PREVIOUS YEAR.

YOU MAY ASK (IF POSSIBLE) YOUR VENDOR TO RAISE THE INVOICE DURING CURRENT YEAR .THE INVOICE IF STATES AS INTEREST HE SHOULD MEKE TDS DEDUCTION ALSO IF APPLICABLE.
R.V.RAO

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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30 November 2007 Each year is a self-contained accounting period - For income-tax purposes, each year is a self-contained accounting period and the revenue authorities can take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than they are concerned with losses which may occur in future - Sir Kikabhai Premchand v. CIT [1953] 24 ITR 506 (SC

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