INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Prior period expenses crystallized during the concerned year -

Assessee company incurred expenses of Rs. 60,309 related to earlier years. AO took the view that as per accounting standard, prior period expenses were not eligible for deduction under section 37(1). Held: Expenditure in question though relating to earlier year but having materialized during the year and in respect of which bills were received during the year, therefore, entire amount having been paid during the year, the whole of the amount was allowable during concerned assessment year 2011-12. Accordingly, AO was directed to allow prior period expenses which crystallized during the assessment year 2011-12.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 36(1)(va)

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