JUDGMENT

Azimah Omar JCA:

A. Background Facts & Tax Law On Waived Debts

[1] Normally, we would address the background facts separately before we delve into the laws surrounding the factual matrix. However, having heard the oral and written submissions by both parties, we find that the subject matter of this appeal is complex and overwhelming in concepts involving accounting, trading, and taxation (more so than it is a fact-laden case). Thus, we are of the view that it is appropriate for us to directly discuss the law and the technical concepts as and when they arise, as we gradually open up the facts of the Appeal.

[2] The Appeal before us is an Appeal against the Learned High Court Judge's ("Learned Judge") decision in affirming the Special Commissioner of Income Tax's ("SCIT") decision that the loan debts which were waived during the relevant/subject Year of Assessment shall be treated as taxable income despite the admitted and undisputed fact that the taxpayer already had been fully taxed on the loan amount (by not deducting the loan debt as a deductible operating expense/liability and instead treating the loan as a gross income) during the preceding Year of Assessment ("YA") befo