Money-lending income as business income supports deduction of amount forgone as business loss

Money-lending receipts were treated as business income because the lending activity was characterised as a business and the relevant monies were regarded as stock-in-trade. On that footing, the amount forgone by the assessee was accepted as a deductible business loss. The Tribunal's approach was supported by an earlier ruling involving the assessee's son, and the issue was answered in favour of the assessee against the Department.

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Issues: Whether the amount forgone by the assessee was deductible as a business loss and whether income from money-lending constituted business income.

Analysis: The Tribunal's view was supported by the earlier decision concerning the assessee's son, where monies received on family partition were treated as stock-in-trade and the lending activity was held to be a business. On that basis, the income arising from the money-lending activity was treated as business income, and the assessee's claim to deduction of the sum forgone was accepted as a business loss.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Department.

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