Bad Debt of Loan given to non related party

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..... Bad Debt of Loan given to non related party
Query (Issue) Started By: - Anand Paltewar Dated:- 21-3-2017 Last Reply Date:- 22-3-2017 Income Tax
Got 5 Replies
Income Tax
We are in to seed and fertilizers trading business we are also doing money lending in same Proprietary firm, one loan of rs 2000000 become bad debt now ,as per provision sec 36 we have not billed or sale any goods and .....

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..... services to that firm.we are paying tax on interest on loan . so is it logical to claim bad debt of loan which is default. Request you to guide us can I show Bad Debt in my P&L . Anand Reply By MARIAPPAN GOVINDARAJAN: The Reply: Your query is not clear. Reply By Anand Paltewar: The Reply: We have given loan of ₹ 2000000 to one party . now loan is default ,he is not not in position to .....

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..... pay intrest and principal from last 4 years. Can we show ₹ 2000000 bad debt in books ? Reply By Ganeshan Kalyani: The Reply: It need to be studied, as lending money is your second business , trading of seed being primary. Business related expenses are allowed as deduction in profit and loss account. Do you prepare one p&l, b/s for both the business? Reply By Anand Paltewar: The Reply: .....

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..... Yes ,we prepare only one p&l and B/s for both business under proprietary firm. Reply By Ganeshan Kalyani: The Reply: If it is so then the bad debt should be allowed to be debited to P&L. However, i welcome views of my collegue expert in this regard. Thanks.
Discussion Forum - Knowledge Sharing .....

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