Bad debt deduction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 April 2013 Dear All,

Can we claim bad debt deduction if our party to which we sold some item on credit not paid the money from last three year?

Please give me any referance for this

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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22 April 2013 You can claim deduction of bad debts. You need to write off the same in books of accounts.

Querist : Anonymous

Querist : Anonymous (Querist)

22 April 2013 please give me any referance of case law on it

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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22 April 2013 Section 36(1)(vii) allows the following as deduction -

"the amount of any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year"

Querist : Anonymous

Querist : Anonymous (Querist)

22 April 2013 THANK U SO MUCH

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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22 April 2013 After 1/4/1989, it is not necessary to establish that debt is irrecoverable,it is enough that the debt is written off in the accounts.

Section 36(1)(vii) and T.R.F Ltd Vs. CIT 190 Taxman 391 (SC) may be referred.

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