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TMI Blog2017 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... tegorical finding by Hon’ble High Court that the fact of loss being genuine was not in dispute. In the facts of the present case, assessing officer himself is recording that assessee made payments to these parties for indemnifying damages caused due to cancellation of contract. As the sale has not taken place at all it cannot be considered as speculative transaction. Accordingly, ground raised by revenue stands dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e remitted the matter to the Assessing Officer for a consideration afresh on the issue of the said loss claim of ₹ 3,12,90,375/-. The only issue that was to be decided by the Tribunal was whether the said loss was speculative or was towards damages for breach of contract in respect of two contracts. The factum of the loss being genuine was not is issue. Therefore, no useful purpose would be served by remitting the matter to the Assessing Officer. In these circumstances, we feel that the impugned order to the extent that it remits the matter to the Assessing Officer for a consideration afresh needs to be set aside. It is ordered accordingly. The matter is restored to the Tribunal for deciding the question as to whether the loss w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach occurs due to non-performance of contract by actual delivery system and thereafter, parties to contract settle amount by being difference between contract price and market price that will not amount in law to settling a contract. What is settled in such a case is settling damages consequent upon the breach. 9. Ld. AR submitted that fact of loss being not genuine was not an issue before the authorities below. Ld. Counsel placed reliance upon decision of this Tribunal dated 29.07.2015 in the case of ACIT versus Ramji Lal and Sons (HUF) in ITA No. 1672/Del/2011 for assessment year 2007-08. 10. On the contrary, Ld. DR relied upon order of assessing officer and reiterated contentions raised by revenue and grounds and requested that appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken a stand, which is supported by several decisions cited before it, including the decisions of Hon'ble Delhi High Court in the case of CIT versus Bhagavan Das Rameswaram the (1984) 149 ITR 387 (Del.) and CIT vs. Hans Machoo & company (2001) to 47 ITR 79 (Delhi.) Stop in the case of Bhagavan Das Rameswaram Dyalpur (supra), Hon'ble Delhi High Court has been pleased to hold that if the contract is settled otherwise than by actual delivery or transfer of the commodity, it is a speculative transaction but if there is a settlement after the breach, it is a case of settling the quantum of damages and the loss is incidental to business are allowable as business loss. Again in the case of CIT vs. Hans Machoo & company (supra), Hon'ble Delhi Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as envisaged under section 43 (5) of the act and the payments made under settlement which falls outside its ambit. A transaction cannot be described as a speculative transaction within the meaning of section 43 (5) of the Act, where there is a breach of contract and on a dispute between the parties damages are awarded as compensation. 16. On perusal of the above clause of contract it appears that timely compliance with the required documents and acceptance of the goods is the essence of the letter of understanding entered into between the buyer and the seller. As assessee has deemed to have breached the contract by not accepting the deliveries of the goods within the agreed period, the seller has the right to claim all losses and damages ..... X X X X Extracts X X X X X X X X Extracts X X X X
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