Prior period expenses

Page no : 2

yusufsahibmaricar (Office Manager Cum Accountant) (40 Points)
Replied 20 October 2012

Prior period expenses means necessary payments to be paid in advance for the current financial period or above.

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yusufsahibmaricar (Office Manager Cum Accountant) (40 Points)
Replied 20 October 2012

Prior period expenses means that payments must be paid in advance for the current financial period or more.

yusufsahibmaricar (Office Manager Cum Accountant) (40 Points)
Replied 20 October 2012

Prior period expenses means that which expenses paid in advance for current and future period.

Milind M. Kulkarni (Practicing CA) (580 Points)
Replied 21 October 2012

My understanding is that prior period expenses are not allowed as deduction under Income Tax Act from the current year's profit nor from any of the previous year's profit. They are absolutely and totally disallowed. Would request Abhilasha to please clarify under which section it is mentioned that it will be allowed in revised return of the earlier year.

Aarush (Delhi) (1566 Points)
Replied 22 October 2012

Its depands on facts of situations, also there is no specfic sec dealing with prior period items in case of allowable (30 to 37) or disallowable (Sec 40, 40A)

Pl note:-

Section 37 say - (Expensses should pertain to current year) but as fas as for income concerned department is not ready to lose its money, it will subject to tax.

refer attached case law "1" which say prior period expenses are allowable.

Sectio 40 (2)(v) say it will be allowable in current year if its is paid.. numerous of case law exist , Go Google.

For rest cases its "disallowable"

There are no specific Sections Dealing with Prior Period Items, either as Allowable (Sec 30 to 37) or as Disallowed (Sec 40, 40A)

Read more at: /forum/prior-period-expenses-disallowed-under-section-169170.asp#.UITrxWdkxv0

exp should be pertaining to current year

Read more at: /forum/prior-period-expenses-disallowed-under-section-169170.asp#.UITrxWdkxv0

Attached File : 81019 1074773 1.pdf downloaded: 558 times

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Mohammed Shahid Rahman (Partner) (143 Points)
Replied 24 March 2016

I made a mistake in last years balance sheet (14-15) of my company. Outstanding Municipal Tax expenses which should be written at 5500/- has been written mistakenly as 4500/- I have paid 5500/- Municipal tax this year (15-16). How and where do I recored extra 1000/- I am not from accounts backgound so an example would be very helpful. I m using Tally 9erp.

Thanks