Bad debt deduction criteria clarified under Sections 36 and 37 - stricter substantiation required; capital expenditure excluded.

Entitlement to a bad debt deduction requires statutory compliance and adequate substantiation; an accounting write off alone does not suffice. The assessee's failure to produce coherent documentary evidence of the nature and terms of the advance, inconsistent characterisation of the payment, and the capital nature of the outflow precluded treatment as a business deduction. The general business expenditure provision does not avail items that are within or expressly excluded by the bad debt framework.

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