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2012 (9) TMI 433 - AT - Income TaxAddition on account of prior period expense - Whether liability of earlier years has been crystallized in this year – Assessee calculation of interest based on simple interest while the bank charging at compounded interest - Bank debit the interest of earlier years in current year - Interest liability booked by assessee as prior period expense - Held that:- There would be some dispute or at least misunderstanding in the mind of the assessee about method of accounting the interest i.e. whether it should be simple interest or compound interest. The rate of tax for all these years remains the same. Therefore, following the decision in the case of CIT vs. Shriram Pistons & Rings Ltd and vs. Vishnu Industrial Gases Pvt. Ltd., assessee is entitled to deduct this amount in computing the income. Decision is in favor of assessee.
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