Convert Ltd is this software developing entity listed in the technological sector of the Johannesburg stock exchang

On $1$ April $2023,$ TradeSteel $($Pty$)$ Ltd$,(\text{'}$TradeSteel$\text{'}),$ a company specialising in global

steel trading, had a debt of R$600000.$ TradeSteel used this debt to fund trading stock,

all of which were tax deductible under section $11($a$).$ TradeSteel's creditor discharged

the debt of R$600000,$ due to TradeSteel's inability to settle this debt due to cash flow

constraints. Of the debt owed, R$400000$ stems from trading stock still held, and the

remaining R$200000$ relates to trading stock sold in the $2023$ year of assessment.

TradeSteel is a South African resident company with a February financial year$-$end.

RReeqquuiirreedd

Discuss and calculate the tax implications for TradeSteel $($Pty$)$ Ltd of the debt

compromise for the $2024$ year of assessment.

Support your answer with references to the Income Tax Act.

Ignore any capital gains tax and VAT implications.

Remember to first state the relevant requirements of the Income Tax Act,

whereafter you apply the requirements to the facts of the scenario.