2019 (10) TMI 1260

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.... by : Shri Bandish Soparkar And Srhi Parin Shah,  ORDER Pradip Kumar Kedia - AM: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals) -9, Ahmedabad (CIT(A)' in short ), dated 25.07.2016 arising in the assessment order dated 05.03.2015 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act ....

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....f its business and being such, it was clearly deductible in the computation of business income." 3. When the matter was called for hearing, the learned AR for the assessee pointed out in the Revenue's appeal that the loss arising to the assessee for breach of contract has been held by the AO to be speculative loss by invoking Section 43(5) of the Act which is contrary to law as enunciated judic....

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....y in its commercial wisdom decided not to honor contracts i.e. not to deliver the oi l but paid the differential amount in monetary consideration and hence, the assessee has settled the contract and paid the consideration for breach of contract at the price lesser than prevailing market rate. In the circumstances, the provisions of Section 43(5) of the Act are not attracted and the loss incur red ....

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....sation for breach of contract and claimed i t as business loss. The AO held i t as speculative loss by treating the transaction as speculative transaction within the meaning of Section 43(5) of the Act. The CIT(A) however held that the contract resulting in payment of compensation did not amount to speculative transact ion and directed the AO to allow the amount as business loss. West raightway no....