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Bad-debts W/off

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This query is : Resolved

CA Sanjay Baheti (Querist)
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19 September 2010 My client being proprietorship concern has 3 customers to whom goods have sold & having o/s Debit balances since last 2.5 years.The Approx. Balance is Rs.84169/-
My Client has considerable & continuious efforts for their recovery by way of telehphone conversation & E-mails with/to them.But He told me that now it is not expected to recover the same in near future.
Now query is whether the same can be w/off as bad-debts o/ff in books or not after keeping in mind accouning concept & from taxation point of view.
pLease reply soonly as tax audit is to be finalised.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 September 2010 It can be written off as bad debt for accounting as well as taxation purposes.
Pl note that the assessee need not establish before the IT authorities that the debt has become bad by virtue of the amendment in section 36(1)(v11) w.e.f 1/4/1989 meaning thereby that the assessee has only to write off the debt as irrecoverable in their accounts.

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