TMI Blog2019 (12) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-5 of paper book, assessee at page 2 of written submission gave details of expenditure incurred for power and water charges which in total amounted to ₹ 10,96,33,163/-. It has been submitted that proportionate cost from Mr. Shivashankarappa has been received whereas, M/s Century Golflinks refused to pay their share amounting to ₹ 1,08,11,537/-, which was claimed by assessee as liquidated damages in its P L account. Liquidated damages are compensation paid for breach of contract. We are therefore, unable to understand how the sum paid by assessee on behalf of M/s Century Golflinks being its proportionate share towards incurring of expenses would amount to liquidated damages. Assessee has also not brought on record to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both in law and on the facts of the case in sustaining the addition of ₹ 10,811,3537/- being the power and water charges incurred for Joint Development Project. 2. He erred in holding that the appellant could have recovered the amount from the land owners. 3. He failed to appreciate that the payments have been made during this year and the expenses have been rightly claimed as deduction. 4. The appellant submits that in any case the addition made I excessive and unreasonable. 5.The appellant therefore, prays that the addition of ₹ 10,811,537/- may be deleted. 2. Brief facts of the case are as under Assessee is a pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s these payments were necessary in regards to ongoing development, assessee made the said payment and claimed it in its profit and loss account under the head liquidated damages. Ld.AR submitted that said sum was incurred by assessee keeping in view commercial expediency and as it was incurred for assessee s own business, authorities below were not correct in confirming the disallowance. 6. On the contrary, Ld.Sr.DR submitted that liability to make the said sum was not on assessee as per the agreement, and therefore, the said sum cannot be said to be an expenditure incurred for purposes of assessee s business. He also submitted that it is unclear as to subsequently, if assessee recovered the said sum from M/s Century Golfli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2 On perusal of agreement, it is observed that 45% of owners share were to be distributed between owner No.1 being S.Shivashankarappa and owner No. 2 being M/s Century Golflinks. In written submission placed at page 1-5 of paper book, assessee at page 2 of written submission gave details of expenditure incurred for power and water charges which in total amounted to ₹ 10,96,33,163/-. It has been submitted that proportionate cost from Mr. Shivashankarappa has been received whereas, M/s Century Golflinks refused to pay their share amounting to ₹ 1,08,11,537/-, which was claimed by assessee as liquidated damages in its P L account. 7.3 In our considered opinion, liquidated damages are compensation p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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