Prior Period Expense allowable If Liability Crystallises Later: Mumbai ITAT Grants ₹96.23 Crore Relief to MSEDCL

DCIT Vs Maharashtra State Electricity Distribution Company Ltd. (ITAT Mumbai) Prior Period Expense Not Disallowable If Liability Crystallises Later: Mumbai ITAT Grants ₹96.23 Crore Relief to MSEDCL The Mumbai ITAT upheld the deletion of a disallowance of ₹96.23 crore made towards prior period expenditure in the case of Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). The Tribunal held that under the mercantile system of accounting, the decisive test is not the year to which an expenditure relates, but the year in which the liability becomes certain, ascertainable and capab...