https://www.taxtmi.com/caselaws?id=750871 ITAT Nagpur dismissed Revenue's appeal regarding disallowance of prior period expenditure under mercantile accounting system. The tribunal held that prior period expenses cannot be disallowed merely because assessee follows mercantile accounting, if the expenditure actually crystallized in subsequent year due to certain reasons. Since assessee consistently followed this accounting practice for years and AO previously allowed such expenses without challenging the system's validity, and the expenditure was genuinely incurred without distorting income, the prior period expenses were allowable. The decision relied on precedent from assessee's own case and Bombay HC ruling in Taparia Tools Ltd. en-us Thu, 28 Mar 2024 00:00:00 +0530 Tue, 02 Apr 2024 09:23:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=750871 ITAT Nagpur dismissed Revenue's appeal regarding disallowance of prior period expenditure under mercantile accounting system. The tribunal held that prior period expenses cannot be disallowed merely because assessee follows mercantile accounting, if the expenditure actually crystallized in subsequent year due to certain reasons. Since assessee consistently followed this accounting practice for years and AO previously allowed such expenses without challenging the system's validity, and the expenditure was genuinely incurred without distorting income, the prior period expenses were allowable. The decision relied on precedent from assessee's own case and Bombay HC ruling in Taparia Tools Ltd. Case-Laws Income Tax Thu, 28 Mar 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=750871