TMI Blog2018 (5) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... able for taxation or not. AO and the Ld. DIT(IT) has not applied their mind at all. Therefore, in the interest of justice and fairplay, we are of the opinion that it requires verification at the end of the AO. Therefore, relying upon the decision in the case of Malabar Industrial Co. Ltd. vs. CIT (2000 (2) TMI 10 - SUPREME Court), we find that AO failed to apply his mind in perspective order passed by him and hence erroneous. AO has not applied his mind. AO has also not verified any supporting material and without making any enquiry. Therefore, we are of the opinion that Ld. DIT(IT) has rightly exercised the jurisdiction under section 263(1). DIT(IT) has without making enquiry has come to a conclusion that this amount is taxable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Offshore Ltd. together constituting 7.5% of paid-up equity share capital of the company at a fixed rate of ₹ 540/- per share on a spot delivery basis on the terms and conditions mentioned in the agreement. In the agreement dated 21/10/2008 clause 7 provided that if the purchaser, namely, Eleventh Land Developers Pvt. Ltd. fails to pay the purchase consideration to the aforesaid mentioned seller group including the assessee on or before 18/11/21008. The purchaser was to pay liquidated damages of ₹ 25 crores @ 82.32 per share. The purchaser failed to make the payment. The parties agreement dated 21.10.08 around at compromise and as per the agreement the assessee has received liquidate damages of ₹ 25 crores being the full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the assessment order was prejudicial to the interest of the revenue in terms of section 263(1) of the Act. The show cause notice was given and the assessee has filed the return and submitted before the Ld. DIT(IT) and the Ld. DIT(IT) without discussing anything about the claim of the assessee directed the AO to tax the sum received of ₹ 34,57,318/- by way of liquidated damages under section 56(2)(vi) of the Act. 3. The Ld. A.R. orally argued and also filed the written submission. Assessee s main contention is that liquidated damages are neither taxable at capital gain nor as revenue income. She further submitted that the Ld. DIT(IT), in a non-speaking order, without considering the detailed explanation of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s High Courts in the case of Grasim Industries Ltd. vs. CIT (321 ITR 92, Bom) and CIT vs. DLF Power Ltd. (329 ITR 289, Del.). The Ld. A.R. further submitted that the order of Ld. DIT(IT) is a non-speaking order. The Ld. A.R. submitted that liquidated damages are not taxable either as capital gain or revenue receipt. She also relied upon the decision of Hon ble Supreme Court in the case of Parimisetti Seetharamamma vs. CIT (57 ITR 532 SC) and in the case of CIT vs. Saurashtra Cement Ltd. [325 ITR 422 (SC)]. 4. On the other hand, the Ld. D.R. relied upon the decision of Kolkata Bench in the case of Stewarts Lloyds of India Ltd. 67 taxmann.com 41 (Kolkata-Trib.) and also relied upon the decision of Hon ble Supreme Court in the case of Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e along with document and details and all the details were before the AO. Therefore, it is not taxable either as revenue receipt or capital receipt. The Ld. A.R. also relied upon the decision of Tribunal but the facts of this case are not similar to the facts cited before us. Therefore, we are of the opinion that this case is squarely covered by the decision of Kolkata Tribunal. Therefore, we do not discuss the judgment relied by the assessee. The Ld. A.R. relied on many judgments and argued that the liquidated damages received from the bridge of contract. Therefore, it is not liable. The Ld. A.R. also relied upon the decision of Hon ble Bombay High Court in the case of CIT vs. Abbasbhoy Dehgamwalla [195 ITR 28 (Bom)] and submitted that liq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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