https://www.taxtmi.com/caselaws?id=193018 An ex gratia Government payment made to compensate loss under a completed trading contract was treated as a trade receipt because it was directly referable to the business operation and operated as an ition to the price of the goods supplied. Under the mercantile system, the amount was attributable to the accounting year in which the trading transaction occurred, even though payment was received later and no enforceable right existed at the time of supply. The text states that such later receipts may justify reopening closed accounts where they are analogous to a trade debt, but not where they are unrelated or contingent. The receipt was therefore taxable as business income in the earlier year, not the year of receipt. en-us Tue, 15 Mar 1960 00:00:00 +0530 Sat, 08 Jul 2017 16:57:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=193018 An ex gratia Government payment made to compensate loss under a completed trading contract was treated as a trade receipt because it was directly referable to the business operation and operated as an ition to the price of the goods supplied. Under the mercantile system, the amount was attributable to the accounting year in which the trading transaction occurred, even though payment was received later and no enforceable right existed at the time of supply. The text states that such later receipts may justify reopening closed accounts where they are analogous to a trade debt, but not where they are unrelated or contingent. The receipt was therefore taxable as business income in the earlier year, not the year of receipt. Case-Laws Income Tax Tue, 15 Mar 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=193018