Provision for inventories
This query is : Resolved
20 March 2011
Are provision made for inventories an a allowable expenditure under income tax?
20 March 2011
Clarify the type of Provision on Inventories you are asking about?
20 March 2011
It is allowable expenditure.
20 March 2011
according to me in income tax, provision not allowable as expenditure. real/actual expenditure will allowable.
20 March 2011
Even i came across many computations where these are disallowed .
Can u tell me under which section it is disallowed or the section where it is said that only real/actual expenditure is allowable...
& In that case all other provision for expenses that we make should also be disallowed.
Can u tell me under which section it is disallowed or the section where it is said that only real/actual expenditure is allowable...
& In that case all other provision for expenses that we make should also be disallowed.
22 March 2011
Hi,
No Provisions will be allowed under the Income Tax Act 1961.
W.R.T your second issue about a particular Section which say thats " Provisions are not Allowed".........
Rather than understanding that way, i believe we should see it as follows
" Since there is no Section which specifically allows Provision on Inventory (whether made for obsolete inventories or real/actual expenditure), therefore there cannot be any claim for Provision "
Unlike " Provision for Bad & doubtfull debts " which is allowed for Banks and Financial Institutions which is specifically given under
Section 36(1)(viia).
Hope i have clarified your Doubt
Thank you,
Regards
CA. Lohith. J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons
No Provisions will be allowed under the Income Tax Act 1961.
W.R.T your second issue about a particular Section which say thats " Provisions are not Allowed".........
Rather than understanding that way, i believe we should see it as follows
" Since there is no Section which specifically allows Provision on Inventory (whether made for obsolete inventories or real/actual expenditure), therefore there cannot be any claim for Provision "
Unlike " Provision for Bad & doubtfull debts " which is allowed for Banks and Financial Institutions which is specifically given under
Section 36(1)(viia).
Hope i have clarified your Doubt
Thank you,
Regards
CA. Lohith. J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Unregistered suppliers utility
- Difference between Date of Payment and Date of Deduction?
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- Journal entry of busniess expenses
- Same demand raised for original as well as rectification request return
- Sale of property held jointly with a non resident Indian
- ITR 4 and Bank transactions
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
