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Sarangpur Cotton Manufacturing Co. ... vs Commissioner Of Income-Tax, Gujarat-I on 29 June, 1982

"10.5. There is no statutory method of 'write off' indicated in the Act. The concept of 'write off' has, therefore, to be understood in the sense of commercial accountancy and, according to it, the amount of a debt is debited to the P&L a/c. The corresponding credit can be given to the debtor's account or to any other account, say, to reserve for bad and doubtful accounts. In the present case, the corresponding credit regarding 'write off', as noted earlier, has been given to reserve for bad and doubtful debts account which in turn is deducted from the debtor's account before taking the final figure of the debtor's account to the balance sheet of the bank. The aforesaid procedure of write off has met with judicial approval as will be clear from the facts and the ratio of the following cases : Vithaldas H. Dhanjibhai Bardanwala vs. CIT (1981) 130 ITR 95 (Guj), CIT vs. Jwala Prasad Tiwari (1953) 24 ITR 537 (Bom) and Sarangpur Cotton Mfg. Co. Ltd. vs. CIT (1983) 143 ITR 166 (Guj.)".
Gujarat High Court Cites 12 - Cited by 71 - A M Ahmadi - Full Document
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