Outstanding balance of Debtors

Atif (CA Final) (40 Points)

06 August 2008  


If there is a debit balance in an account, which is in the nature of advance given to a person(No sales affected)  and which i outstanding for many years, hence not recoverable. What is the entry to be passed? and what would be the implication of the same for Tax purposes. plzz specify which section of IT Act to be referred.

Plzzz clarify