Honourable Supreme Court in Taparia Tools Ltd vs. JCIT has held that normally revenue expenditure incurred in a particular year has to be allowed in that year and if the assessee claims that expenditure in that year, the Department cannot deny the same (s.36(1)(iii)/ 37(1)) . Fact that assessee has deferred the expenditure in the books of account is irrelevant.
However, if the assessee himself wants to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of ‘Matching Concept’ is satisfied – (2015-ITRV-SC-162)
