https://www.taxtmi.com/caselaws?id=208497 Deferred sales tax liability discharged under a State prepayment scheme was examined for taxability as business income under section 41(1). The Tribunal noted that the assessee paid the net present value of the future liability under the amended sales tax law, and that the Government had not waived any part of the liability but had only accepted early discharge at a discounted value. It held that the precondition of a prior allowance or deduction in the relevant sense was not satisfied and that payment of net present value did not constitute remission or cessation of liability. The differential amount was therefore treated as a capital receipt and not taxable under section 41(1). en-us Wed, 10 Nov 2010 00:00:00 +0530 Tue, 26 Aug 2025 14:42:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=208497 Deferred sales tax liability discharged under a State prepayment scheme was examined for taxability as business income under section 41(1). The Tribunal noted that the assessee paid the net present value of the future liability under the amended sales tax law, and that the Government had not waived any part of the liability but had only accepted early discharge at a discounted value. It held that the precondition of a prior allowance or deduction in the relevant sense was not satisfied and that payment of net present value did not constitute remission or cessation of liability. The differential amount was therefore treated as a capital receipt and not taxable under section 41(1). Case-Laws Income Tax Wed, 10 Nov 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=208497