https://www.taxtmi.com/caselaws?id=187977 Bad debt deduction requires that the debt be revenue in nature, arise in respect of the assessee's business and be accounted for on mercantile (non-cash) basis; irrecoverability of a sum that, when receivable, represented a capital receipt does not convert it into a revenue loss. A debt is incidental to business only where it arises from transactions integral and necessary to ordinary business operations; mere association, existence of a decree, or recovery proceedings is insufficient. On the facts, the unpaid price for sold machinery was a capital transaction and not incidental to trading, so the amount is not deductible as a business bad debt. en-us Tue, 28 Aug 1962 00:00:00 +0530 Mon, 14 Nov 2016 17:36:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=187977 Bad debt deduction requires that the debt be revenue in nature, arise in respect of the assessee's business and be accounted for on mercantile (non-cash) basis; irrecoverability of a sum that, when receivable, represented a capital receipt does not convert it into a revenue loss. A debt is incidental to business only where it arises from transactions integral and necessary to ordinary business operations; mere association, existence of a decree, or recovery proceedings is insufficient. On the facts, the unpaid price for sold machinery was a capital transaction and not incidental to trading, so the amount is not deductible as a business bad debt. Case-Laws Income Tax Tue, 28 Aug 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=187977