Short payment received from debtor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 April 2016 Hello Experts,
I am service provider and i have issued the invoice Rs. 117679/- to service receiver but service receiver has deducted Rs. 15000 as penalty for Non completion the contract within the deadlines, please let me know weather this 15000 is deductable in profit & loss account as bad debts or not,

Regard
Shyam sunder

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 April 2016 Debit the amount under expenditure head as penalty for delayed completion of contract. This expenditure can be deductable in P & L ac.

Message likes : 1 times

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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15 April 2016 Its a business loss which is by name of penalty of late completion so you can book in P&L as late completion penalty.

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