Remission or cessation of trading liability is taxable business income when an earlier deduction or allowance was already claimed.

Recovery of earlier expenditure, loss or trading liability is treated as business income where a deduction or allowance had already been granted and the assessee later obtains a refund, recovery, or benefit by way of remission or cessation of liability. The rule applies to trading or revenue liabilities, including waiver, forgiveness, or unilateral write-off, and can extend to successors in business. It does not cover mistaken payments or calculation errors, but only amounts for which a legal allowance was earlier granted.

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