1976 (4) TMI 103

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....d by the assessee as damages for breach of contract is an allowable business expenditure or a speculation loss which cannot be set off except as against speculation profit. 2. The assessee is a registered firm engaged in the business of manufacture and sale of castor oil on wholesale. During the asst. yr. 1973-74, the assessee entered into 4 contracts with Hindustan Lever Ltd. for the sale of c....

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....n the case of CIT vs. Pioneer Trading Co. Pvt. Ltd. reported in 70 ITR 347 held that the amount paid by the assessee was not to be treated as a speculation loss and he directed this sum to be treated as an allowable expenses. Hence the appeal by the Revenue. 3. The learned Departmental Representative contended before us that inasmuch as the assessee failed to deliver the goods contracted, the t....

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....y the assessee wherein delivery was not given and it does not constitute a speculative business. 5. On hearing the rival contension and in view of the latest trend of the Madras High Court and Supreme Court decisions, the transaction is clearly a speculative one and hence it is a speculative loss which cannot be set off against the normal business profits. 6. It is admitted that the assessee....

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....asad Podar's case 30 ITR 140 and also the decision of the Calcutta High Court in CIT vs. Pioneer Trading Co. Pvt. Ltd. 70 ITR 347 (Cal). 7. The Madras High Court in the two cases cited above and especially in the case reported in 96 ITR 353 (Mad) had elaborately discussed this issue and had held that s. 43(5) of the Act dispenses with all other formalities except that there must be actual deliv....