1993 (1) TMI 47

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..... t, 1961, made at the instance of the Revenue, the following question has been referred to us for opinion by the Income-tax Appellate Tribunal : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the contract with Jam Manufacturing Co. Ltd. and the other contract with Sayaji Mills No. 2 resulting in the payment of compensation did not amount .....

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..... an arbitration award as damages for a breach of the contract ? A contract can be said to be settled if instead of effecting the delivery or transfer of the commodity envisaged by the contract the promisee, in terms of section 63 of the Contract Act, accepts, instead of it, any satisfaction which he thinks fit. It is quite another matter where instead of such acceptance the parties raise a dispute .....

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..... ensation for its breach. What is really settled by the award of such damages and their acceptance by the aggrieved party is the dispute between the parties. The law, however, speaks of a settlement of the contract, and contract is settled when it is either performed or the promisee dispenses with or remits, wholly or in part, the performance of the promise made to him or accepts instead of it any .....

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