TMI Blog1990 (9) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act, 1961, the following question as a question of law : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs. 30,000 paid by the assessee to M/s. N. Mansotta Bros. was not loss on account of speculative transaction within the meaning of section 43(5) of the Income-tax Act, 1961 ? " The proceedings relate to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 30,000 as damages. The assessee claimed the aforesaid payment of Rs. 30,000 as business loss. The Income-tax Officer, however, held that the goods not having been delivered in terms of the contract, the resultant loss was speculative in character and was, thus, not a business loss. The finding of the Income-tax Officer was confirmed by the Appellate Assistant Commissioner. When the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions and held that the payment herein being in the nature of damages for breach of contract, the payment was not a loss in speculative business. Dr. Balasubramaniam, learned counsel for the Department, has invited our attention to the Supreme Court decision in the case of Davenport and Co. P. Ltd. v. CIT [1975] 100 ITR 715 to show that, where the contract of purchase or sale of a commodity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, submits that, in view of the Supreme Court decision in CIT v. Shantilal P. Ltd. [1983] 144 ITR 57, the question must be answered in the assessee's favour. We have already set out the facts above. The Tribunal has given finding that there was first a breach of contract. Thereafter, there was a settlement of liabilities arising out of the breach of contract and that the amount of Rs. 30,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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