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Querist : Anonymous (Querist)
29 July 2010 A trader was incurring losses year after year finding it diffficult to discharge the liability to a machine financer. The party waived the o/s loan of Rs.3 lacs.How would be treat it? either credited to bad debts account or show income from other sources or credited to Machinery account.
Please reply urgent.

29 July 2010 cessation of liability shall be taxable u/s 41(1) only if the party has already claimed it as expenditure



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