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2017 (7) TMI 533 - AT - Income TaxDisallowance of prior period expenditure - Held that:- One point which clearly emerges is that there is no dispute insofar as the nature of the expenditure is concerned, as being relatable to the business of the assessee. It is also correct that the assessee is following the mercantile system of accounting, so however, the impugned expenses may relate to an earlier period, but they cannot be said to arise in the preceding year. Quite clearly, the expenses have arisen and crystallized during the year under consideration inasmuch as the requisite bills, details, etc. have been received by the assessee for incorporation in accounts by its Head office during the year under consideration and, therefore, the same have been rightly accounted for in the instant year. There is no controversion to the assertion of the learned representative that such practice has been consistently followed by the assessee and that such practice evens out any difference in deductibility of the total expenses over a period of time. Considering the aforesaid, we find no reason to deny the claim of assessee for deduction of the impugned expenditure.- Decided in favour of assessee.
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