https://www.taxtmi.com/caselaws?id=185041 Where an existing loan is converted into long-term funding through notes issued at a discount and redeemable at a premium, the true character of the receipt depends on the real commercial substance of the bargain. The court treated the arrangement as bona fide financing at a reasonable commercial rate, with the discount and premium reflecting capital risk rather than return for the use of money. A mere excess over the principal does not by itself make the amount income. The discount and premium were therefore capital in nature and not taxable as income. en-us Thu, 01 Jul 1943 00:00:00 +0630 Thu, 28 Jul 2016 17:25:03 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=185041 Where an existing loan is converted into long-term funding through notes issued at a discount and redeemable at a premium, the true character of the receipt depends on the real commercial substance of the bargain. The court treated the arrangement as bona fide financing at a reasonable commercial rate, with the discount and premium reflecting capital risk rather than return for the use of money. A mere excess over the principal does not by itself make the amount income. The discount and premium were therefore capital in nature and not taxable as income. Case-Laws Income Tax Thu, 01 Jul 1943 00:00:00 +0630 https://www.taxtmi.com/caselaws?id=185041