In May 08' a pvt. ltd. co. issued a cheque of Rs.50 lac to an individual (an outsider but very important person for business point of view). No documents were signed as that person had promised to return the money with in a month. Now months are gone but that person is not in a position to return the money. He says he will return the money in future but refuses to sign any document. My questions are :-
What should be the accounting entry ?
What should be the tax treatment ?
How and when can it be claimed as bad debts ?
CAclubindia
