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2014 (1) TMI 842 - AT - Income TaxDisallowance made u/s 37 of the Act - Liquidated damages charged by Government of India on account of delay in supply of vaccines – Held that:- There was an agreement between the assessee and Govt.of India for supply of medicines - assessee had written off liquidated damage as per the terms and conditions of the agreement - payment of liquidated damage has to be allowed – Relying Sardar Prit Inder Singh Versus Commissioner Of Income-Tax [1985 (7) TMI 35 - PATNA High Court] - damages for delay in supply and for supply of articles of inferior quality was not a penalty for infraction of law hence same was deductible and business expenditure - amounts paid to Government as penalty and damages for delay in execution of contracts was a deductible item - the order of the FAA reversed – Decided in favour of Assessee. Disallowance of amounts written off as irrecoverable u/s 37 of the Act - Advance given to Government departments – Held that:- FAA has given a categorical finding of fact that no details of departments except for of the PWD Department were furnished - in view of lack of proof that as to when and to whom these advances were given same could not be allowed u/s.37 or 36(1)(vii)of the Act - The order of the FAA does not suffer from any infirmity - In absence of details of expenditure claimed by the assessee he has rightly disallowed the claim of the assessee – Decided against Assessee.
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