Admissibility of prior period expense under it act

This query is : Resolved

Rehbar Siamwala (Querist)
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10 September 2011 We have incurred Around Rs. 6 lacs of local authority expense of which only 1 lacs pertains to current period while remaining realtes to previous periods.

The notice for the same expense was served for the 1st time in May'11 by the authority for all the previous years i.e. from 2005-06 to 2010-11.

We have paid the full amount in July'2011.

Can we claim these expense in full? if yes, then are these expenses allowed in the F.Y 2010-11 by making provision or in F.Y. 2011-12 in which we have paid?

Expecting early response....

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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11 September 2011 Prior Period Expenses are not allowed under Income Tax Act

Rehbar Siamwala

Rehbar Siamwala (Querist)
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15 September 2011 I am really sorry for this but the expense being statutory payment to local authority thus as per section 43b we may claim it

As per Section 43B clause (a) - Any sum payable by way of tax, duty,cess or fee (by whatever name called under any law for the time being in force) are deductible on payment basis subject to :-
1. payment of such expense is made on or before the due date of filling of return and
2. Evidence of such payment is submitted along with the Return of Income

We are having evidence of payment as well

Rehbar Siamwala

Rehbar Siamwala (Querist)
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15 September 2011 Whether this expense cannot be claimed U/S 43B