Bad debt or not
This query is : Resolved
02 August 2011
X PROPRIETARY CONCERN HAS GIVEN A LOAN TO Y PROPRIETARY CONCERN WHICH IS A SISTER CONCERN. BUT Y HAS CLOSED ITS BUSINESS AND THE LOAN IS NOT RECOVERABLE. WHETHER SUCH UNRECOVERABLE AMOUNT CAN BE TREATED AS BAD DEBTS OR NOT?
[REFER CASE LAW : Jt. CIT vs. Rallies India Ltd. (2010) 3 ITR 1 (Mum.) (Trib.)]
[REFER CASE LAW : Jt. CIT vs. Rallies India Ltd. (2010) 3 ITR 1 (Mum.) (Trib.)]
03 August 2011
1.For claiming Bad Debts, the first requirement is existence of debt. Here Debt means debt arising in the normal course of business.
2. Unless X is not having the business of money lending as its main business activity, loans given can not be treated as
debt.
3. In my view, X will not be allowed the claim for Bad Debts from his business income. IT IS A CAPITAL LOSS AND TO BE WRITTEN OFF AGAINST CAPITAL ACCOUNT.
2. Unless X is not having the business of money lending as its main business activity, loans given can not be treated as
debt.
3. In my view, X will not be allowed the claim for Bad Debts from his business income. IT IS A CAPITAL LOSS AND TO BE WRITTEN OFF AGAINST CAPITAL ACCOUNT.
03 August 2011
For writing off bad debts it should be a debt and it should be in due course of the business. If loan has been given to supply material or services to Y company then it can be treated as business debit.
Give the proper and full details for correct and to the point reply.
Anyhow I agree with the expert in case of general reply to your question
Give the proper and full details for correct and to the point reply.
Anyhow I agree with the expert in case of general reply to your question
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
- USE THE BANK ACCOUNT OF WIFE
- If ITC not claimed is there any issue
- Benefit of employee
- Place of supply or billing addres which applicable for tax
- CAPITAL GAIN IN NEW REGIM
- GST ITC to Garment dealers
- Capital Gain Tax on Foreign Citizen
- Rental Agreement for Joint property holders
- TDS on payment to NRE account
- Profit From trading in MCX Taxable income Rate?
- Special resolution for sale of property by pvt ltd co.and its subsidiary
- GST Credit Reversal for change in GST Rate.
- Rectification of Mistake in AOC4
- GST on Medical insurance preimum
- GST under RCM paid at which rate
- TDS on repair charges done on exported Goods in Korea
- Form 26AS dosnot contain the amount of TDS/TCS with respect o TAN mentioned in scheule TDS 1/TDS 2/
- Refund of VAT ITC due to Evaporation loss.
- ITC on IGST
- TDS on Sale of Properties
Trending Online Classes
-
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Industry Expert04 February 2025
CAclubindia
