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TMI Blog2019 (10) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... ute between the parties damages were awarded as compensation by an arbitration award. The award of damages for breach of contract is not the same thing as the party to the contract has intended to settle the contract following a breach or non-performance of the contract. Such payment towards breach is not akin to the word settled used in Section 43(5) - In view of the decision of the Hon ble Supreme Court and the decision of various High Courts following the principles laid down by the Hon ble Supreme Court, we do not see any error in the conclusion drawn by the CIT(A). We thus decline to interfere. - Decided against revenue. - I.T.A. No. 2241/Ahd/2017 - - - Dated:- 4-10-2019 - Shri Pradip Kumar Kedia, Accountant Member And Shri Mahav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the loss arising to the assessee for breach of contract has been held by the AO to be speculative loss by invoking Section 43(5) of the Act which is contrary to law as enunciated judicially by the various Courts. The learned AR for the assessee submitted on facts that the assessee had claimed contract settlement loss of ₹ 62,34,974/ - and ₹ 3,20,77,500/ - which represents difference between purchase and sale price at the time of nomination of contract in favour of buyer and seller as applicable. The assessee has not made any delivery of commodity and settled the contract by making payment of difference of amount between sale price and purchase price. The learned AR thus submit ted that the amount of loss has been inflicted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as business loss. The AO held i t as speculative loss by treating the transaction as speculative transaction within the meaning of Section 43(5) of the Act. The CIT(A) however held that the contract resulting in payment of compensation did not amount to speculative transact ion and directed the AO to allow the amount as business loss. West raightway notice that the Hon ble Supreme Court in CIT vs. Shantilal (P. ) Ltd. (1983) 144 ITR 57 (SC) held that the transact ion cannot be described as a speculative transactions 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 were awarded as compensation by an arbitration award. The award of damages for breach of contra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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