https://www.taxtmi.com/caselaws?id=7433 A liability arising from partnership accounts after dissolution does not become a loan in the ordinary course of a money-lending business merely because the assessee entered it in money-lending books and debited interest. Conversion of such an account debt into a loan requires evidence of an agreement between the parties or a legally recognised usage or custom changing the character of the obligation. A unilateral book entry by the assessee, even coupled with later interest credits and tax collection on that interest, is insufficient to establish a new loan relationship. On that basis, the amount was not deductible as a bad debt under section 10(2)(xi) of the Income-tax Act, 1922. en-us Thu, 07 Nov 1968 00:00:00 +0530 Thu, 19 Feb 2009 18:15:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7433 A liability arising from partnership accounts after dissolution does not become a loan in the ordinary course of a money-lending business merely because the assessee entered it in money-lending books and debited interest. Conversion of such an account debt into a loan requires evidence of an agreement between the parties or a legally recognised usage or custom changing the character of the obligation. A unilateral book entry by the assessee, even coupled with later interest credits and tax collection on that interest, is insufficient to establish a new loan relationship. On that basis, the amount was not deductible as a bad debt under section 10(2)(xi) of the Income-tax Act, 1922. Case-Laws Income Tax Thu, 07 Nov 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7433