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2005 (3) TMI 48 - HC - Income TaxLoss - In the circumstances, the reason which weighed with the Tribunal, namely, that if the assessee had continued to supply goods, it would have suffered more losses than the damages that the assessee may be required to pay, is besides the point. Though the Tribunal has termed it as a business loss, in fact, no loss has been incurred during the year under consideration. A demand from a third party calling upon the assessee to make the payment would not result in a situation whereby the assessee would incur a loss, if the assessee is disputing the demand so made. The Tribunal having accepted that the liability was a contractual liability and had not been discharged during the year under consideration, committed an error in law in holding that it was a business loss allowable for the year under consideration.
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