Write off of Assets, sundry debtors/creditors

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Nagendra PGupta (Querist)

08 June 2009 Dear Expert
Hello,

As per the Provisions of the Income Tax Act, Section 36 (1)(vii), the Sundry Crediotrs/Debtors may be written off if taken in books so.
Plz advise the a/cg treatment, taxation aspect and allowability of all above i.e., sundry debtors, creditors, fixed assets(including amortisation etc.)
High regards

Nagendra Pd. Gupta
ACA

M Prabhakar Menon

M Prabhakar Menon (Expert)

09 June 2009 There is no restriction on what can be written off provided the Assesseing Officer concurs with your view, however there are restrictions in the case of certain write offs which will have to complied with.As far as accounting treatment is concerned it is advisable to open an "SUNDRY BALANCES WRITTEN OFF A/C" and transfer all amounts written off to this account the net balance in this accout will be transfered to the P & L A/c of that year as either Income or Expenditure depending on whether the net balance is credit or a debit balance.

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