Prior period expenses

My understanding is that prior period expenses are not allowed as deduction under Income Tax Act from the current year's profit nor from any of the previous year's profit. They are absolutely and totally disallowed. Would request Abhilasha to please clarify under which section it is mentioned that it will be allowed in revised return of the earlier year.

Its depands on facts of situations, also there is no specfic sec dealing with prior period items in case of allowable (30 to 37) or disallowable (Sec 40, 40A)

Pl note:-

Section 37 say - (Expensses should pertain to current year)  but as fas as for income concerned department is not ready to lose its money, it will subject to tax.

refer attached case law "1" which say prior period expenses are allowable.

Sectio 40 (2)(v) say it will be allowable in current year if its is paid.. numerous of case law exist , Go Google.

For rest cases its "disallowable"

Hi 

I made a mistake in last years balance sheet (14-15) of my company. Outstanding Municipal Tax expenses which should be written at 5500/- has been written mistakenly as 4500/- I have paid 5500/- Municipal tax this year (15-16). How and where do I recored extra 1000/- I am not from accounts backgound so an example would be very helpful. I m using Tally 9erp.

Thanks

Hi,

income tax caluculation for corporate companys

allowed in the year of expense i.e in the Next year like 43B 

Only if your case is selected for regular assessment.