Acconting for shortage of goods

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2011 Dear Expert
Good day and greeting
As we are manufacturer of corrugated boxes .
When we are sending goods to our customers some time they reporting shortage of goods , this may be either due to counting mistake or goods sold by drivers during transit .
My queries is that either we can show this as loss in transit or goods pilfered in transit as debtors are ,making payment after making adjustment for the same .
Is it is admissible expanses as per Income Tax Act .
Further sometime goods were rejected on ground of inferior quality how we accounting for that .
Your valuable advise on the above mentioned matter will be highly appreciated by me

Thanks

RANGA SRINIVAS

RANGA SRINIVAS (Expert)
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25 April 2011 Dear

Lost during the transit and also loss on account of inferior quality is allowable expenditure

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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25 April 2011 if loss arises in the normal course of business then allowed as expenses.

P/L a/c Dr.
to stock

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2011 Dear Ravi
And how we should account for goods rejected due to inferior quality .
We are neither receiving goods nor getting payment for the same .

Your advice will be highly valued by me .

Thanks

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