https://www.taxtmi.com/caselaws?id=8816 Amounts paid on forfeiture of promissory notes executed to secure performance of modified export contracts were treated as a trading loss deductible in computing business income. The contracts were genuine and entered into in the ordinary course of export business, and the breach arose because the assessee could not supply the required quality and quantity of ore. The forfeiture payment was a liability incidental to carrying on the business, satisfying the commercial test of profits. It was therefore characterised as a revenue loss incurred in the course of business rather than capital expenditure, and deduction under section 10(1) of the Indian Income-tax Act, 1922 was allowed. en-us Wed, 20 Sep 1972 00:00:00 +0530 Thu, 04 Jun 2009 18:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8816 Amounts paid on forfeiture of promissory notes executed to secure performance of modified export contracts were treated as a trading loss deductible in computing business income. The contracts were genuine and entered into in the ordinary course of export business, and the breach arose because the assessee could not supply the required quality and quantity of ore. The forfeiture payment was a liability incidental to carrying on the business, satisfying the commercial test of profits. It was therefore characterised as a revenue loss incurred in the course of business rather than capital expenditure, and deduction under section 10(1) of the Indian Income-tax Act, 1922 was allowed. Case-Laws Income Tax Wed, 20 Sep 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8816