Purchases.

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This query is : Resolved

ramesh vadnala (Querist)

28 November 2007 We have purchased Raw materail in March month and we accounted the same bills in month of April month, Please tell me that these bills treated as prior period expenses and disallowed in Incometax, pl.explain me in detail with sections

KAUSTUBH M JOSHI

KAUSTUBH M JOSHI (Expert)

28 November 2007 Please clear me the date of the bill, its treatment in your stores, date of receipt of material, dispatch details, whether the stock of the said material was included in closing stock of RM during physical verification. Please reply

ramesh vadnala

ramesh vadnala (Querist)

28 November 2007 Bill date 15.03.07 date of receipt of material 25.03.07 in stores but taken in accounts 05.04.07 and some purchases dates in march'07 date of receipts april'07 and taken into accounts april'07
these transactions are treated as prior period ?

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

29 November 2007 Since you have received the stock in last year and included in the closing stock .....it has become part of profit of last year .....the matching purchase is of last year .......as per matching principle this is last year item .......IN FACT YOUR LAST YEAR INCOME IS INFLATED TO THAT EXTNT ........YOU MAY REVISE THE RETURN OF LAST YEAR DEPENDING ON FACTS OF YOUR CASE

o.velavan

o.velavan (Expert)

03 December 2007 For first instance,you have to revise the return as stated by CA sampat jain.
In second case ,i dont know about your practise for purchase entry.In every year you follow the method that date of purchase of date of invoice or date of arrival of goods.if you follow the method as in question then o.k.But this year only you follow this method see the procedure followed in earlier period then you decide it for revised return.

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