1986 (1) TMI 9

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....ked in specific manner, deliverable between October, 1968, to June, 1969. Messrs India jute Co. Ltd. failed to supply the aforesaid goods. The assessee-company sent a bill for damages for non-supply of goods amounting to Rs. 59,194. Messrs India jute Co. Ltd. repudiated the claim. The assessee-company then filed Suit No. 4117 of 1969 in the Calcutta High Court on December 10, 1969. The suit is still pending. The assessee claimed that this amount of Rs. 59,194 was not assessable as income because it had not been realised in the relevant assessment year nor was there any chance for the success of the claim. The Income-tax Officer, however, repudiated this submission and added back this amount as income. The matter was taken up in appeal but t....

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....act dated August 14, 1968, with M/s. India Jute Co. Ltd. was not enforceable. However, since the matter was sub judice before the High Court, they did not go into the merits of this aspect. It held that a mere claim does not give rise to accrual of income in the absence of any provision for damage or compensation in the contract. It was held that there was no such provision in the contract between the parties. Hence, this amount was not liable to be added back. At the instance of the Department, the Tribunal has submitted this statement of the case and has referred the following question of law for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum o....