Provision for Bad Debts

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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

Provision for bad debts: whether accounting provisions qualify as deductible income tax expenses when not specifically written off. Provision for bad debts: whether creating an accounting provision (Bad Debts debited; Provision for Bad Debts credited) is an allowable income-tax deduction when no specific debts are written off, and whether a provision made in a later year for earlier sales can be claimed as a bad-debt expense in the year of provision.