Prior period expense whether allowed in income tax or not ??

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CA Abhishek Singh (Querist)
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07 September 2023 suppose purchases made during the year 100 cr which is reflected in GST. However invoice for 1 cr purchases is not found at the time of audit/nor duplicate copy collected from parties upto the date of audit and it is disallowed by the auditor in fy 21-22.

however party gave duplicate copy of invoice post audit.

My question : can 1 cr purchase accounted in fy 22-23 pertaining to fy 21-22 be allowed as expenditure in fy 22-23 ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 Yes in case of sale income related to such purchase is accounted in stock or sale during the year or in the previous year.

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CA Abhishek Singh

CA Abhishek Singh (Querist)
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07 September 2023 sale accounted in FY 21-22

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 Yes, you can account it as prior period expenses.

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CA Abhishek Singh

CA Abhishek Singh (Querist)
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07 September 2023 thanks. you mean it will be allowed as deduction in fy 22-23 although sales booked in fy 21-22

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 September 2023 Yes it will be allowed as corresponding income is shown in previous year.
Case laws are there in favour of it.

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