Prioe period items is allowable or not in computaion of Gross total Income?
If it is disallow then please tell me the section.
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Prior period items
Replies (4)
Prior period items cannot be adjusted against current year income, prior period items as the name suggest require adj to prev AYs only(if possible return of the concerning prev year can be revised)....
According to Sec 37, only those expense which are relating to current year is allowable as expenses. Hence prior period expenses gets disallowed
some expenses are allowed at accrual basis whereas some are at cash basis.......hence a uniform opinion cannot be stated....
Section 37 would be relevant as it clearly gives states an expenditure to be eligible for deduction or allowance should be incurred during the previous year. Thus, Prior period items would be disallowed under section 37
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