Toshar Ahuja (Chartered Accountant) (107 Points)
14 July 2013Assessee given advance to a Company for Supply of Plant & Machinery, Company gone into liquidation, the advance is not recovered then the amount is write off from books, as per income tax act this amount is allowed as bad debts or not???
CA Kumar Mukesh
(CA CMA FINAL and Advance Excel Trainer)
(6881 Points)
Replied 14 July 2013
Only those items which is any time during any prevoius year was part of Income under Income Tax Act, can be allowed as Bad Debts i.e. debtors for sale for goods & service but not for Loans & Advances except Financial institutions
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 14 July 2013
YES as entry for bad debts is booked its allowed as deduction.
CAclubindia
