1974 (10) TMI 10

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... llowing question has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the loss incurred by the assessee by payment of Rs. 14,001 as compensation or damages for non-delivery of the part of the goods under the various contracts by way of difference on the basis of prevailing market price was deductible or allowable .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... by the Appellate Assistant Commissioner. The revenue preferred an appeal before the Tribunal. The Tribunal found that in most of the contracts substantial delivery of jute goods during the various periods had been effected and only in the case of one or two contracts the goods had not been delivered in lieu of which payment on the basis of difference had been made. It was found by the Tribunal th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips. The proviso to that definition provides certain Explanations with which we need not concern ourselves in this reference. Therefore, in order to be a speculative transaction it should be a transaction under which the contract fo .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ontract the cause of action was no longer based on the contract itself but on its breach. Where the money which the assessee received was in settlement of the amount of damages suffered by the assessee by reason of the breach of the contract to deliver, it was held that the receipt was not a receipt from a speculative transaction as defined in Explanation 2 to section 24(1) of the Indian Income-ta .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... n "contract settled" relying on the first two decisions of the Calcutta High Court under section 43(5) of the Income-tax Act, 1961, in the case of B. R. Kushalraj v. I. T. Commissioner [1974] 96 ITR 401 (Mys). In the aforesaid view of the matter the question referred to this court must be answered in the affirmative and in favour of the assessee. Each party will pay and bear its own costs. PYNE .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X