Previous year expenses claim in current year

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Satish kumar (Querist)
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24 September 2016 Dear experts,
In previous year we have not claimed expenditure (labelling charges) in the P&L a/c amounting 4 lacs. Shall we claim the amount 4 lacs in the current year P &L a/c. If disallowed under which section it is disallowed.

Thanks in advance

CA Sumiit B Nagpal

CA Sumiit B Nagpal (Expert)
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24 September 2016 Prior Period expenses are not allowed in general. As section 37 says the expenses are allowed u/s 37 that is not referred to in section 36 of the Act and is revenue in nature incurred wholly and exclusively for the purposes of business and THAT TOO IN CURRENT YEAR. Better to revise the return of earlier year to claim that expenses if you can do so. Otherwise it is a matter of law which can be discussed well in appeal if A.O. refuses to give the relief. There are some case laws also in this regard in favour of assessee . But as per my experience, the A.O. would not allow it and would add back to the returned income.
You may win in appeal before the CIT(A) or Tribunal in this regard.

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