prior period expense

The only way is to demonstrate that due to justifiable reasons the provision could not be made.

Mr. Srinivasaraghavan is right. It can further be elaborated that the expenses were not quantifiable with certainty as on the date of Balance Sheet date and the same could only be ascertained thereafter.

mr.srinivas is right ,as prior period expenses arise due to omission of items at the time of preparion of Finanacial Stmt.sd it has to be disclosed as per As-5 ,under the line of P& L A/c

Hi all,

I understand , you all saying logically and correctly. But we should not forget that  we have to demonstrat it in front of Income tax officer. It depends on his mind and view.

In normal cases, Income tax officers are disallowing prior period expenses.

No.

They Are Disallowed As The General Conditon Of Sec.37(1) Is Violated

"Expenditure Should Relate To Previous Year".

Hai Friends,

Colud anyone say the tax implications regarding Prior Period Expenses. Regarding the following.

1. Whether Prior Period Expenses will be allod as deduction as per Income Tax Act. If yes tell me the % that will be alloed as deduction.

2. Tell me under which section it will be mentioned or is there any judgement by any court.

The prior period items will not allowed in normal case. It is also to be important that when you availed the service or received the goods, as the case may be

prior period items are for sure not allowable. Sec. 37(1) requires that the expense should relate to previous year only.

Is sole propritory firm allowed prior period expenses as per IT