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2010 (1) TMI 10 - HC - Income TaxPrior Period expenses - Technical fee was payable from time to time but the same had not been shown as payable in the books of accounts in the year prior to the assessment year 2003-2004 because the parties had mutually agreed to defer the payments towards the liability. The assessee’s stand was that the said fee for all the years had become payable and had been charged to the Profit & Loss Account and paid during the assessment year 2003-2004. The assessee had classified the said amount as pertaining to prior period expenses. It is also to be noted that the tax in respect of the said payment was paid in the current assessment year – held that - when a deduction is not allowable because of the statutory provisions, it would make no difference whether the same was claimed or not by the assessee. - This section 40(a)(i) starts with a non-obstante clause which implies that section 40, overrides the provisions of Section 30 to 38 of the Act – mere passing a debit entry in the books of accounts, of these expenses would not be sufficient – deduction allowed in the year of payment
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