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2016 (4) TMI 1183 - CALCUTTA HIGH COURTPayment of liquidated damages - whether the amount was payment of dividend and not allowable/deductible expenditure in the hands of the appellant-company? - Held that:- The fact that the payment took the character of liquidated damages, does not obliterate the fact that the liability to pay was on account of dividend. Failure on the part of the assessee to pay dividend was a breach of the contract which entitled the UTI Bank to recover damages. Therefore when the assessee paid the damages the assessee was really discharging its liability to pay dividend under the contract. We are, as such, convinced that the payment was, in fact, a payment of the agreed dividend and therefore, the Tribunal, the Commissioner of Income-tax (Appeals) and the Assessing Officer took a correct view in the matter. - Decided in favour of revenue
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