Provision for inventories
This query is : Resolved
20 March 2011
Are provision made for inventories an a allowable expenditure under income tax?
CA. RAVIKUMAR
(Expert)
20 March 2011
Clarify the type of Provision on Inventories you are asking about?
CA. RAVIKUMAR
(Expert)
20 March 2011
It is allowable expenditure.
CA Ravi Sisodia
(Expert)
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.
CA. Lohith Jagadeesh
(Expert)
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
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Taxation of crypto futures in India Fy 2026- 2027
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- MSME disclosure and disallowance
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
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
