Provision for Bad Debts

[Guest]

Dear Sir,

One Query Regarding that in Financial Year I have Create a Provision for Bad debts so Account Entry should be

Bad Debts

To Provision for Bad Dents

So In Income tax Bad Debts Expenses Should be Allowed

If Yes then reply with Case law ( if Possible )

2) If Sale of goods to Parties in the year 2009 after 3 year Parties not given a payment then in the year 2012 i have create a Provision for bad debt entire amount so in financial 2012 bad debts expenses can be allowed in income tax

If Yes then reply with Case law ( if Possible )

Thanks

AI Summary

Are Bad Debt Provisions Deductible for Income Tax? Inquiry on 2012 Provision for 2009 Sales. Case Law Needed. A user inquired about the treatment of provisions for bad debts in income tax. They questioned whether creating a provision for bad debts in the financial year allows for bad debt expenses to be deductible for income tax purposes, requesting case law references if applicable. Additionally, they asked if a provision for bad debts created in 2012 for goods sold in 2009, where payment was not received after three years, would be allowed as a deductible expense in the 2012 financial year, again seeking case law support if possible.