17 September 2014
MR A SOLD GOODS TO MR B OF RS 5000. NOW MR B NOT PAID ANYTHING TO MR A . SO RS 5000 IS NOW B.DEBT FOR MR A. AND SUCH 5000 IS TAXABLE TO MR B BECAUSE IT IS ALLOWED AS A DEDUCTION WHEN IT IS PURCHASED.
17 September 2014
becoming a bad debt in A's books wont affect B's books. Unless and until he writes off the liability, it remains a liability and no tax can be charged
19 September 2014
ANSWER TO YOUR LAST TO LAST ANSWER :
I KNOW SIR THAT DEDUCTION IS ALLOWED OF EXP. ON ACCRUAL BASIS.BUT NOW MR B IS NOT LIABLE TO PAY ANY EXP(PURCHASE AMOUNT ). SO a DEDUCTION WHICH WAS ALLOWED EARILER WHICH IS AGAIN TAXABLE AS A DEEMED INOCME
CAclubindia
