prior period item

This query is : Resolved

Prashantjha (Querist)
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20 January 2011 Can any body tell me that goods purchased on 29.03.2010 and not entered in the books of accounts as goods in transit on 31.03.2010, and subsequently entered as purchase on 02.04.2010 will be a prior period item or not?

The goods are received on 02.04.2010 and the MRN is of the same date.

What will be its treatment in income tax ?

Vivek Raju P

Vivek Raju P (Expert)
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20 January 2011 If i get your query correctly.. purchase order was given, but the goods were not received, payment was not made.

There is no need for an entry as it does not have a financial impact as long as it is just an order for goods which are not received and no payment or advance has been given.

Only after these are received and a DC is made, will they be taken in GRIR Clg account