debtor

For claiming any debt as a bad debt, one has to satisfy following two conditions :(1) Debt is written off as bad debt in the Profit and Loss Account by making corresponding entry in the party account. (2) Debt is taken in to account in computing the income of the assessee of the previous year in which debt is written off or in earlier previous year. Full Article

The assessee wrote off an amount as a “bad debt” in its accounts and claimed a deduction u/s 36 (1) (vii). The AO asked the assessee to furnish information as to the names and addresses of the debtors, copies of ledger accounts and efforts made to realize these dues. On failure by the assessee to furnish the information, the claim was disallowed on the ground that the onus to prove that the debt was a bad debt was on the assessee which had not been discharged. Full Article