1972 (8) TMI 33

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....r on January 25, 1946, and whether the amount was, assessable in the assessment year 1945-46 or in the assessment year 1946-47 ? " This court directed the Income-tax Appellate Tribunal on 25th January, 1962, to submit a statement of the case on the question of law set out above. The Tribunal found that the entire correspondence between the, assessee and the military authorities and the minutes of their meetings were not brought on record. It remanded the case to the Appellate Assistant Commissioner of Income-tax who allowed the parties to produce that material before him. On the basis of that material produced he submitted a remand report to the Tribunal. The Tribunal then submitted a statement of the case and made the remand report a pa....

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....f military value. This was followed by another meeting in February, 1945, at which the question of payment of compensation to the assessee was considered. 302 pieces were considered to be complete or deemed to be complete and the amount payable to the assessee was determined at Rs. 1,18,888. The assessee was not satisfied with the amount of compensation and accordingly there was a third meeting on February 20, 1945. At that meeting, the basis for the payment was fixed at cost plus, overheads plus a margin of profit and the amount payable to the assessee was determined at Rs. 1,77,000. In pursuance of this arrangement the assessee received part payment. Since the balance was not paid, he took up the matter again with the military authorities....

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..... That statement contains a clause which provides for the payment of compensation when the contract is terminated before it is completed. Under this clause, the assessee is entitled to, compensation at a fair and reasonable rate. What would be the fair and reasonable rate has not been mentioned. The basis for the payment was no doubt fixed at the meeting held on February 20, 1945, the basis being the cost plus overheads plus certain marginal profits, but it appears that this basis was not final. The sum of Rs. 1,77,000, which was determined on that basis as the amount of compensation payable to the assessee was eventually referred to the authorities at Delhi, who did not approve of the amount of compensation. This led to a last meeting betw....