prior period expenses

This query is : Resolved

VINAYAK D PRABHU (Querist)
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19 November 2008 deductibility of prior period expenses under income tax act.is there any particular section which speaks about disallowance of prior period expenses?

CA Pawan Goswami

CA Pawan Goswami (Expert)
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19 November 2008 There is no specific section. It is disallowed in Sec.37(1).

Ravikumar.G

Ravikumar.G (Expert)
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19 November 2008 Prior period expenses is a capital expenditure in the eyes of law. Better allocate it respective fixed assets.

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VINAYAK D PRABHU

VINAYAK D PRABHU (Querist)
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19 November 2008 In section 37, it is mentioned that any expenditure other than personal and capital, being laid out or expended, can be claimed as deduction.so how it can be taken for granted. The term incurred is nowhere mentioned in that section.. please help me out..

SANDEEP AGGARWAL

SANDEEP AGGARWAL (Expert)
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20 November 2008 There are one more condition in section 37(1), that it should be incurred in previous year. Since prior period exp. are not incurred in previous year, it can not be claimed. Although it can be claimed by revising the return of that previous year in which it was incurred but due to error or ommission it was not claimed.

Regards,

CA. Sandeep Aggarwal