https://www.taxtmi.com/caselaws?id=7445 Damages recovered or retained by way of a deduction from the contract price for breach of warranty, where the assessee supplied foodgrains not meeting contractual quality, were held deductible in computing business profits under section 10(1) of the Income-tax Act, 1922. The Tribunal's factual finding that the amount represented compensatory damages, not a dishonest or criminal penalty, was decisive. On that basis, the liability arose in the ordinary course of the assessee's trade as a paddy procuring agent and constituted an incidental commercial loss, with the deduction merely reducing the price payable for the goods. The amount was therefore an admissible business deduction. en-us Thu, 23 Jan 1969 00:00:00 +0530 Fri, 20 Feb 2009 08:01:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7445 Damages recovered or retained by way of a deduction from the contract price for breach of warranty, where the assessee supplied foodgrains not meeting contractual quality, were held deductible in computing business profits under section 10(1) of the Income-tax Act, 1922. The Tribunal's factual finding that the amount represented compensatory damages, not a dishonest or criminal penalty, was decisive. On that basis, the liability arose in the ordinary course of the assessee's trade as a paddy procuring agent and constituted an incidental commercial loss, with the deduction merely reducing the price payable for the goods. The amount was therefore an admissible business deduction. Case-Laws Income Tax Thu, 23 Jan 1969 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7445