INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Prior period expenses -

Assessee-company claimed deduction in respect of prior period expenses crystalised in relevant year under consideration. It submitted that Board's approval of the said expenditure was received subsequently; therefore, the same crystalised in the relevant year under consideration. AO disallowed the said claim. Further, CIT (A) upheld the order of the AO. Held: Assessee ought to have claimed such expenditure in the year when the expenditure was incurred. Undisputedly, the assessee deducted tax on the said expenditure and Revenue did not doubt the genuineness of the same. Further, assessee submitted that the AO should be directed to allow such expenditure when the expenditure was incurred as tax on the same was already deducted by the assessee. Therefore, the AO was directed to allow expenditure in the year when such expenditure was incurred, if law so permits at such belated stage.

REFERRED :

FAVOUR : Directions issued.

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 37(1)

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