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TMI Blog1985 (6) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... te of delivery and there was much further delay. The assessee, therefore, sought for compensation from the Bombay company to the extent of Rs. 46,000 of which the break up was as under: Rs. 1. Additional cost we had to pay to get the machinery from other sources 26,000 2. Interest for Rs. 15,500 calculated at 12 per cent for 6 months 930 3. The loss on account of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure by way of interest and incurring a loss of profit on account of delayed production. The Commissioner (Appeals) agreed with the assessee and held that the amount of Rs. 16,000 should not have been deducted under section 43(1). The revenue is aggrieved. 3. It was submitted by the learned departmental representative that Rs. 16,000 had to be rightly excluded under section 43(1) as reimbursement of cost. The learned counsel for the assessee opposed this plea on account of the fact that the amount of Rs. 16,000 did not represent reimbursement of cost by the Bombay company. In this regard he cited the decisions of the Tribunal in Laxmi Udyog v. ITO [1980] 18 CTR (Jp.) 27 and McDowell Co. Ltd. v. ITO [1984] 18 ITJ 56. 4. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive contention urged by the revenue merits consideration. 6. In the present case, the assessee had placed an order for certain machinery with Dave Trading Co. of Bombay. The default of the company put the assessee to loss. Only one of the components was the escalating price they have to pay if the orders were placed elsewhere. In addition there was loss of interest and loss of profit. A lump sum of Rs. 16,000 was paid against the claim of Rs. 46,000. This was a payment by Dave Trading Co. to the assessee. The assessee eventually placed orders for the machinery with a third party with whom Dave Trading Co. had no concern. The assessee paid the price fixed to the third party. The amount of Rs. 16,000 paid by Dave Trading Co. did not go to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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