https://www.taxtmi.com/caselaws?id=7892 Remission obtained by an assessee from a bank under a compromise decree was treated as taxable remission of a trading liability under section 10(2A) of the Income-tax Act, 1922. The assessee followed mercantile accounting and had already claimed deduction for business losses connected with the transaction; the bank advance was made for trading purposes and the bank remained the creditor until satisfaction of the decree. Because the waiver of the balance due arose directly from that business transaction, the remission had a proximate nexus with the trading activity and fell within the provision rather than constituting a purely capital adjustment. The question was therefore answered against the assessee and in favour of the revenue. en-us Mon, 04 May 1970 00:00:00 +0530 Mon, 23 Mar 2009 17:00:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7892 Remission obtained by an assessee from a bank under a compromise decree was treated as taxable remission of a trading liability under section 10(2A) of the Income-tax Act, 1922. The assessee followed mercantile accounting and had already claimed deduction for business losses connected with the transaction; the bank advance was made for trading purposes and the bank remained the creditor until satisfaction of the decree. Because the waiver of the balance due arose directly from that business transaction, the remission had a proximate nexus with the trading activity and fell within the provision rather than constituting a purely capital adjustment. The question was therefore answered against the assessee and in favour of the revenue. Case-Laws Income Tax Mon, 04 May 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7892