https://www.taxtmi.com/caselaws?id=7840 Deductibility of a loan loss and related legal costs depends on whether the advance sprang directly from and had a sufficient nexus to the taxpayer's trade; form of separate agreements or account-keeping does not prevent a business deduction where the advance is in substance connected to trade financing. Applying that principle, the advance constituted part of the assessee's financing activity, so the loss qualifies as a trading loss or an irrecoverable business debt and is deductible; proportionate legal expenses attributable to that loss are likewise deductible. The Tribunal's contrary finding is rejected on the basis of insufficient evidence to displace the commercial nexus. en-us Mon, 02 Dec 1968 00:00:00 +0530 Thu, 19 Mar 2009 17:25:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7840 Deductibility of a loan loss and related legal costs depends on whether the advance sprang directly from and had a sufficient nexus to the taxpayer's trade; form of separate agreements or account-keeping does not prevent a business deduction where the advance is in substance connected to trade financing. Applying that principle, the advance constituted part of the assessee's financing activity, so the loss qualifies as a trading loss or an irrecoverable business debt and is deductible; proportionate legal expenses attributable to that loss are likewise deductible. The Tribunal's contrary finding is rejected on the basis of insufficient evidence to displace the commercial nexus. Case-Laws Income Tax Mon, 02 Dec 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7840