Prior Period

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2011 The company has booked an expenditure in 2011-12 for the service taken in 2010-11.Bill date is April,2011.

No provision was made in 2010-11. Will it be disallowed for tax purposes?.Pleas advise will it be covered under prior period.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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05 July 2011 If bill is dated April, 2011 then it is to be account in the year 2011-12 but if the services has been taken with an agreement or MOU then it is to be booked in the year 2010-11 and is to be treated as prior period in 2011-12.

It depends what services the company has taken. Let us take an example that the company has hired a C.A for the appeal and at that time no fee was finalised. Without finalisation of fee the CA has sent the Bill in April then the same is to be account in the current year and expenses of current year. No need to book under prior period.

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