TMI Blog2021 (11) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... had interpreted the decision of Saurashtra Cement Ltd. [ 2010 (7) TMI 11 - SUPREME COURT] and come to a conclusion that it does not help the assessee is incorrect. The Tribunal is required to rely the legal proposition laid down in the Hon ble Supreme Court as well as the other decisions which have been referred to by the Hon ble Supreme Court. Matter requires to be remanded to the Tribunal for a fresh consideration to consider the legal issue which was decided by the Hon ble Supreme Court in Saurashtra Cement Ltd. It goes without saying that the Revenue also will be given adequate opportunity by the Tribunal to put forth their contentions on the grounds canvassed by the assessee before us in this appeal. In the result, the appeal is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Act, 1961 and its purported findings in that behalf, including that the Assessing Officer had recorded his dissatisfaction with regard to the appellant s claim or that the appellant had not furnished any materials/evidence to show that no borrowed funds were utilised in making the investments, are arbitrary, unreasonable and perverse? (b) Whether the Tribunal was justified in law in holding that the compensation received by the appellant from Suzlon Energy Ltd. in terms of the purchase orders on account of failure of performance guarantee parameters of capital assets, namely, wind turbine generators, purchased by the appellant was on revenue account for reducing loss incurred in the course of business and not a capital re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in the case of DCIT v. Xpro India Ltd. in ITA 214/Kol/2011 and ACIT v. RDS Construction Pvt. Ltd. in ITA 377 to 383/PN/2013. The Tribunal while interpreting the decision in Saurashtra Cement Ltd. (supra) went into the factual aspect and stated that in the said case, the compensation was paid for late delivery of the machinery whereas in the assessee s case, the compensation was paid on account of the machinery supplied not functioning to the optimum effect. In our considered view, the manner in which the Tribunal distinguished the decision in Saurashtra Cement Ltd. is incorrect. What is required to be considered by the Tribunal is the ratio laid down by the Hon ble Supreme Court in the said decision and then test the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion whether a particular receipt is capital or revenue has frequently engaged the attention of the courts but it has not been possible to lay down any single criterion as decisive in the determination of the question. Time and again, it has been reiterated that answer to the question must ultimately depend on the facts of a particular case, and the authorities bearing on the question are valuable only as indicating the matters that have to be taken into account in reaching a conclusion. In Rai Bahadur Jairam Valji [1959] 35 ITR 148 (SC), it was observed thus (page 152): The question whether a receipt is capital or income has frequently come up for determination before the courts. Various rules have been enunciated as furnishing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate a person for cancellation of a contract which does not affect the trading structure of his business, nor deprive him of what in substance is his source of income, termination of the contract being a normal incident of the business, and such cancellation leaves him free to carry on his trade (freed from the contract terminated) the receipt is revenue : Where by the cancellation of an agency the trading structure of the assessee is impaired, or such cancellation results in loss of what may be regarded as the source of the assessee s income, the payment made to compensate for cancellation of the agency agreement is normally a capital receipt. In the light of the above, we are of the view that the matter requires to be remanded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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