Prior period items

Prior period items cannot be adjusted against current year income,  prior period items  as the name suggest require adj to prev AYs only(if possible return of the concerning prev year  can be revised).... 

some expenses are allowed at accrual basis whereas some are at cash basis.......hence a uniform opinion cannot be stated....

Section 37 would be relevant as it clearly gives states an expenditure to be eligible for deduction or allowance should be incurred during the previous year. Thus, Prior period items would be disallowed under section 37