Law:

Section:

Section 28(i) of the income-tax act, 1961-Business loss/deduction-Assessee-firm entered into contract with electricity board for supplying certain goods by july 1969 or extended time-Breach would entail reduction of contract price of non-supplied portion of plant-Assessee defaulted in supplying goods within tin fixed and was required by board to pay Rs. 69,383 as damages which was not paid-Board deducted same out of payments made for second contract-Boad subsequently waived damages-Assessee offered said amount for taxation in assessment year 1975-76-Whether tribunal justified in holding that liability to pay damages had crystallized and was a allowable deduction in assessment yea 1974-75-Held, no Facts The assessee-firm followed the Dussehra yes as the previous year. On 21-9-1968, the assessee entered into contract with U.I Electricity Board for the supply of 5,000 Km of ACSR Weasel conductor by July 1969 The agreement stipulated that in case of non performance of the contract within the original or extended time, the Board would b entitled to reduce the contract price by certain prescribed percentage on the contract value of such portion only of the plant as could be used commercially and efficient during each week between the appointed time and the actual time of acceptance. Due t non-availability of raw material, the assessee could not supply the goods within the time fixed and sought extension for six months which was refused by the Board. In the relevant previous year (Dussehra 1970 to Dussehra 1971), the Board took no action against the assessee but, on 14-6-1972, it required the assessee to pay Rs. 69,383 within 15 days s damages for the said breach of the terms of the agreement. The assessee did not pay the said amount. When it took a second contract the Board deducted the same from the payments made to the assessee but sub-sequently waived it at the assessee's protest The assessee offered the same for taxation i the assessment year 1975-76 but they claimed its deduction in the assessment year 1974-7: The ITO disallowed the claim, holding (that as the contract was to be execute by July 1969, the damages were not relevant to the said assessment year;…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492