https://www.taxtmi.com/caselaws?id=793557 After the insertion of the Explanation to section 36(1)(vii), a mere provision for bad and doubtful debts is not deductible, but a debt remains allowable as a bad debt if it is written off as irrecoverable in substance. The assessee had debited the disputed debt to the profit and loss account and reflected it in the ledger as irrecoverable, and the pending recovery proceedings supported that treatment. The absence of a formal closure entry in each debtor account was not decisive where the accounts otherwise showed an actual write-off. Any later recovery would be taxable under section 41(4). en-us Tue, 16 Jun 2026 00:00:00 +0530 Thu, 18 Jun 2026 08:45:41 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=793557 After the insertion of the Explanation to section 36(1)(vii), a mere provision for bad and doubtful debts is not deductible, but a debt remains allowable as a bad debt if it is written off as irrecoverable in substance. The assessee had debited the disputed debt to the profit and loss account and reflected it in the ledger as irrecoverable, and the pending recovery proceedings supported that treatment. The absence of a formal closure entry in each debtor account was not decisive where the accounts otherwise showed an actual write-off. Any later recovery would be taxable under section 41(4). Case-Laws Income Tax Tue, 16 Jun 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=793557