https://www.taxtmi.com/caselaws?id=277240 Appeal concerns whether a Rs. 55,030 write-off qualifies as a deductible bad debt under Section 10(2)(xi) of the Income-tax Act, 1922. The analysis applies the mercantile system test: a debt is deductible only if it represented trading receipts that would have been brought into profit under mercantile accounting. The liability arose from accommodating another and was not linked to the assessee's timber business, nor did the assessee carry on a suretying or lending trade; such accommodation losses are treated as capital, not trading, losses. Applying these principles the sum is excluded from deduction under clause (xi). en-us Fri, 08 Jun 1951 00:00:00 +0530 Thu, 29 Nov 2018 16:29:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=277240 Appeal concerns whether a Rs. 55,030 write-off qualifies as a deductible bad debt under Section 10(2)(xi) of the Income-tax Act, 1922. The analysis applies the mercantile system test: a debt is deductible only if it represented trading receipts that would have been brought into profit under mercantile accounting. The liability arose from accommodating another and was not linked to the assessee's timber business, nor did the assessee carry on a suretying or lending trade; such accommodation losses are treated as capital, not trading, losses. Applying these principles the sum is excluded from deduction under clause (xi). Case-Laws Income Tax Fri, 08 Jun 1951 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=277240