Bed Debts w/off
This query is : Open
MANOJ CHOUDHARY
(Querist)
25 April 2009
Can is it possiable big amount like 1 crore directly written off without provision
please give details what impect in books and taxatation allow/disallow
Can is it possiable big amount like 1 crore directly written off without provision
please give details what impect in books and taxatation allow/disallow
Shyam Lal Naik
(Expert)
25 April 2009
So far income tax is concerned, provision for bad debt is of no consequence. Income tax is concerned with actual writting off of the debt.
Similarly, amount of bad debt is also of no relevance. Whether the amount is big or small is a relative term.
If the amount was treated as income in earlier years and was actually written off in the books of accounts, is an allowable expenditure.
Similarly, amount of bad debt is also of no relevance. Whether the amount is big or small is a relative term.
If the amount was treated as income in earlier years and was actually written off in the books of accounts, is an allowable expenditure.
25 April 2009
agree with expert
taxindiaconnect
(Expert)
01 May 2009
The income tax recognises the actual write off and not the provisions irresprctive of the amount. There are enough case laws to support the contention of the assessee that once the assessee has actully written of the debts, it is allowable in the year of write off.
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