https://www.taxtmi.com/caselaws?id=23773 Advances made by an assessee to a transport contractor for carrying iron ore, adjusted against freight charges, were held to arise from an arrangement integral to the assessee's trading operations. Applying s. 28 and ordinary commercial principles, the HC held that a non-capital loss incidental to the trade is deductible even if it does not fall within ss. 36 or 37. As transportation was necessary to fulfil supply obligations, the advances enabled continued performance; substantial freight activity showed direct business nexus, and the irrecoverable post-adjustment balance resulted from the contractor's default without creation of any capital asset. The irrecoverable balance was therefore allowable as a trading loss, and the reference was answered for the assessee and against the Revenue. en-us Thu, 07 Sep 1989 00:00:00 +0530 Mon, 22 Dec 2025 16:50:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=23773 Advances made by an assessee to a transport contractor for carrying iron ore, adjusted against freight charges, were held to arise from an arrangement integral to the assessee's trading operations. Applying s. 28 and ordinary commercial principles, the HC held that a non-capital loss incidental to the trade is deductible even if it does not fall within ss. 36 or 37. As transportation was necessary to fulfil supply obligations, the advances enabled continued performance; substantial freight activity showed direct business nexus, and the irrecoverable post-adjustment balance resulted from the contractor's default without creation of any capital asset. The irrecoverable balance was therefore allowable as a trading loss, and the reference was answered for the assessee and against the Revenue. Case-Laws Income Tax Thu, 07 Sep 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=23773