Deduction of prior period expenditure in the current year under Income Tax

Recent Decision

COMMISSIONER OF INCOME-TAX Versus EXXON MOBIL LUBRICANTS P. LTD [2010 -TMI - 78175 - DELHI HIGH COURT]

Whether expenditure related to prior period are eligible for deduction during the current year?

The answer is yes where liability was deter-mined and crystallized in the year in question.

Relied upon Decisions:

Nonsuch Tea Estates Limited Versus Commissioner of Income-Tax, Madras [2008 -TMI - 6434 - SUPREME Court]

Saurashtra Cement And Chemical Industries Limited Versus Commissioner Of Income-Tax [2008 -TMI - 19446 - GUJARAT High Court]

Additional Commissioner Of Income-Tax Versus Farasol Limited [2008 -TMI - 26220 - RAJASTHAN High Court]

The following decision of Apex court has been distinguished:

Bharat Earth Movers Versus Commissioner of Income-Tax [2008 -TMI - 5816 - SUPREME Court]