Gokul Viswanath Shenoy (Company Secretary & Finance Manager) (430 Points)
27 August 2010I have a doubt regarding prior period expenditure...is the prior period expenditure or the expenditure of the previous period is allowable as a deduction in the current period?..i know that the prior period expenditure has to be disclosed in the notes to the financial statements.
kalyan
(Manager - Accounts)
(99 Points)
Replied 28 August 2010
Hi Gokul.....
In case of CIT vs. Vishnu Industrial Gases (Delhi High Court)Where the department had not disputed that the expenditure was deductible in principle but was only disputing the year in which the deduction could be allowed HELD, castigating the department, that as the tax rates were the same in both years, the department should not fritter away its energies in raising questions as to the year of deductibility/taxability.
So it is allowed.
source - https://caknowledgequest.blogspot.com/search/label/Income%20Tax
Gokul Viswanath Shenoy
(Company Secretary & Finance Manager)
(430 Points)
Replied 28 August 2010
hi kalyan..so does that mean that the prior period expenditure is allowable as expenditure in the current year?..i mean if the tax rates are same in both the years...what if the tax rates are not the same in both years( year of prior expenditure n year in which deduction is claimed,which is most often the case)
CAclubindia
