Bad Debt cannot be claimed as deduction unless written off in Books

Allu Arvind Babu Vs ACIT (Madras High Court) The claim of creation of provision for such expenditure, which is not yet incurred and is only intended to be written off as compensation paid to the land owner for the admitted failure of the Assessee to complete the contract in the manner as agreed between the parties, does not entitle the Assessee to claim the same either as Bad Debts under Section 36(1)(vii) of the Act or as Business Expenditure under Section 37 of the Act. If mere creation of a provision for intended liability to be settled in future, which claim is contradicted by  himself, n...