Trading liability u/s 41

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Neeraj (Querist)
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05 July 2013 Hello Everyone,
Please clarify what is the test of an item to be a trading liability u/s 41?As per Rollinstare(Something like this) case law term loan for purchase of capital asset is not a trading liability but working capital loan is.Plus what is the tax treatment of term loan waived(for purchase of capital asset) & under which section?Also all this under business profession head
Thanks

TKKKKKK

TKKKKKK (Expert)
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05 July 2013 If term loan waived is for purchase of capital asset , it will be not taxable. but If waiver is for trading liability, it will be included as income in income from business and profession head.